If you’re thinking of buying a home, you may be aware of a challenge that has appeared over the past year. After the period of record-low mortgage rates that lasted from about 2020 through 2021, rates have since risen back to a level that was last seen in the 2000s. This means that financing a home is now more expensive than it was in recent years.

The increase in the cost of home financing is particularly noticeable for the many current homeowners who obtained their mortgages when rates were lower. For them, buying a home now often means giving up an old mortgage with a lower rate and monthly payment for a new mortgage with a higher rate and payment. Some commentators are referring to this phenomenon as “golden handcuffs” that are holding some would-be homebuyers back from their purchases.

Nonetheless, the need for people to buy and sell homes remains the same. While there’s no magic button to turn back time and snag a lower mortgage rate from the past, you may be able to make your home purchase more affordable by utilizing one or more of the cost-saving strategies below.

Buy now, refinance later 

Just because you buy a home with a mortgage at a specific rate and monthly payment doesn’t mean you have to keep those terms forever. If mortgage rates drop again – and many experts expect them to do just that in the years ahead – you could refinance your mortgage to a lower rate and payment. As with any mortgage application, you’ll still need to meet the qualification requirements to obtain a refinance.

Utilize a rate buydown

If you need some temporary relief on a new mortgage rate, then a buydown may be the solution for you. A rate buydown allows you to pay an upfront fee and reduce your mortgage rate and monthly payment for the first one, two or three years of your new mortgage. This can provide you with financial flexibility while you wait for the opportunity to refinance or for your income to increase.

Become a landlord 

Instead of selling a current home and giving up your old mortgage, you may be able to keep both and turn them into an income-generating asset. Renting out your home is a way to leverage a low-rate mortgage and today’s strong rental market to subsidize the cost of a new home. While owning a rental property isn’t for everyone, it can be a rewarding option.

Explore more affordable homes

One final strategy for reducing the cost of your home purchase is to seek out a more affordable property to buy. This could mean purchasing in a lower-priced market, buying a fixer-upper, downsizing to a smaller property or sharing a home with extended family.


As much as we may wish it to be true, there’s rarely such a thing as the perfect time to buy a home. With property values historically trending upward and family and career obligations that need to be met, the right time to buy may simply be whenever you can afford to do so. With the help of the strategies above, that time may be sooner rather than later for you.

If you’re interested in discussing your home financing options and learning how much home you can afford, please get in touch today for a free mortgage consultation.