You may have heard of this catchy phrase while doing your research in real estate. It simply means you’re committing to a long-term relationship with the house you love. Then you can dump the interest rate when you refinance. This idea is simple and sounds easy, but is this a good idea?
Let’s dissect the phrase. First, we will discuss the “Marry the house” piece.
Most people buy a particular property because they fall in love and develop an emotional attachment to it. Your intention when you first buy it will be to keep it for the long haul. After all, a “marriage” is expected to persist, not just last for a year or two. The idea is to buy your dream home and not worry about the finances. Marriages don’t always last, and there is always a penalty to pay when ending it.
As the saying suggests, your home financing can be temporary, like your last date. With the ability to refinance your mortgage, you can keep the house but change the rate. This phrase also assumes that the rates will be lower in the future. It sounds appealing and simple, but you’re taking the risk of not knowing how the rates will look when it comes time to refinance. You think there will always be a chance to refinance in the future once the mortgage rates go down again. Essentially, we’re talking about dating with the expectation that you’ll find a better date in the future.
There are pros and cons to everything. Most Canadians want to get into real estate to escape rising rents and pay their own mortgage instead of someone else’s. “Marry the house, date the rate” is a good way to put things into perspective. Maybe you don’t buy your dream home right away. Instead, buy a less expensive home that you could build equity in, then do some home renovations to increase the property value and sell in the future. Or continue to save for a larger down payment to have a lower interest cost, and then refinance in the future when hopefully the rates might be lower.
At the end of the day, you can’t predict the future and there are a lot of “what-if’s” to consider. “Marry the house, date the rate” is used to help soften the blow when mortgage rates are high, and to help homebuyers focus more on the emotional attachment than the rate. Don’t risk your financial future on faulty assumptions of interest rates going down, or of your home’s value appreciating. The future is unpredictable just like a date is. But you may be surprised at options that you didn’t know are available.
Ready to find out if you can marry the house and date the rate? Our team is here to help. Fill out our contact form or give us a call at 250-590-6520 (toll-free 1-855-590-6520) to see how we can find the best solution for your situation.
Auxilium Mortgage Corporation is based in Victoria, BC and works with clients locally and across Canada. The Auxilium team has over 100 years of combined financial experience and access to dozens of lenders to help you meet your goals.
This post reflects the best available information at the time of writing/last update. To ensure that you have the most up-to-date information, contact us to confirm the details for your specific situation.