Who benefits most when taking advantage of lower than average interest rates?

Interest rates over the last decade and a half have averaged 3.3%. With current interest rates discounted at a whopping 50% of this, the lowest it has been since as far back as 1940 by the way, you may want to know what this means to you. There is no mistaking that these record low rates are a result of the COVID-19 global health and economic crisis. Many think that since the virus itself continues to overstay its welcome, that these interest rates aren’t going away anytime soon either. Unfortunately, I would argue that this is not likely the case.

Economists and experts say a vaccine is what people need to instil consumer confidence back into the economy, and with the news of successful vaccine trials coming out of both North America and Russia, this has shown to have contributed in a positive way. Combine that with the long awaited results of the tumultuous U.S. presidential election, it seems that this good news is pushing the bond market toward higher yields.  Note that these current yields were not seen since June of this year. Unfortunately for borrowers, higher yields normally lead to higher fixed rates.

But who does the potentially higher rates affect the most? I would say that the prospective home buyers, home owners currently in a higher-rate mortgage, and homeowners with high interest debt are the ones that should make haste in taking advantage of these remarkably low interest rates as there are signs of a potential increase.

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