How is the current geopolitical situation impacting mortgage rates?

With the tensions rising around the world, mortgage rates have seen a slight rise compared to last week in a sign that geopolitical situations can influence the market and mortgage rates. 

To fully understand how and why mortgage rates can change in reaction to these situations, some events that fall under the geopolitical description are: war, elections, political tension and instability, and natural disasters. During global times of uncertainty, investors will seek safer assets, which can have a ripple effect on other markets, such as the bond market and mortgage rates. 

If you are looking to buy a home or refinance, make sure you keep an eye on mortgage rates so you can see how they are being affected by geopolitical events.  

When you are ready to take advantage of the current mortgage rate, start your online loan application. 

Recent geopolitical events have seen the dollar drop while precious metals, like gold and silver, have increased. With uncertainty in the markets, investors are viewing these as safer bets. 

The Dow Jones, S&P 500 and Nasdaq dropped slightly after President Donald Trump’s announced plan to impose 10% tariffs on NATO allies starting in February and increasing to 25% in June as he seeks to acquire control of Greenland. 

Since his announcement, President Trump has worked out a deal with NATO’s leadership and said he would not be moving forward with the tariffs.  

If investors are uncertain of what will happen in the world, they tend to sell off any bonds they may own in favor of ones that might not move with geopolitics as much. If many investors choose to sell their bonds, bond prices can fall. 

Bond prices have fallen after much of Trump’s recent announcements. 

Bond prices and mortgage rates are typically bought by the same investors and compete for their business, leading to a direct relation between the two. So, as the yield of bonds increases, mortgage rates tend to rise as well. 

However, there have been times when bonds prices and mortgage rates have uncoupled, so this is not always the case. 

Here are some of the major geopolitical situations that can affect financial markets and investment. 

• Ukraine’s conflict and ongoing war with Russia 

• High tensions in the Middle East between multiple countries and groups

• Trump’s imposed tariffs 

• Trump’s desire to control Greenland 

Yes, now is a good time to get a mortgage, refinance or a HELOC.  

Recently, mortgage rates fell to a 3-year low, which is great news for new homebuyers or those looking to refinance or tap into their home’s equity. 

Lower mortgage rates could mean less interest paid and therefore less money spent over the life off your loan. These lower rates make homeowning, refinancing and tapping into your home equity more affordable. 

A popular option borrowers use when looking to tap into their home equity is through applying for a HELOC, or home equity line of credit. HELOCs let you access funds based on a portion of your home that you own, or home equity. The funds from a HELOC can be put toward any expenses you may have.  

Current mortgage rates won’t stay forever, as the market can be volatile, and rates can change daily. If you wait for rates to drop lower, you risk watching rates rise. If you get a loan during this time and rates continue to drop, you can always refinance your loan to match the lower rates. 

Take advantage of current rates when applying for a mortgage, refinance or HELOC by starting your loan application today! 

^{Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Refinancing your mortgage may increase costs over the term of your loan. Restrictions may apply.} 

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