If you’re in the market for a loan higher than $417,000 — what the industry calls a “jumbo loan” — you may have noticed that interest rates haven’t favored you in recent years. Typically, these loans are offered at around .25 percentage points higher than conventional loans, according to the Mortgage Bankers Association.
Now, however, lenders are taking a second look at this market, and jumbo loan interest rates have fallen below rates for conventional loans.
“One big reason jumbo rates are so low is because lenders want to attract wealthy clients and hang on to them,” Malcolm Hollensteiner, head of consumer lending for TD Bank told CNN Money. Once clients sign up for a mortgage, he added, the bank can “cross sell them other products, like brokerage services.” And after wealthy clients secure one of these low-rate loans, they become long-term customers, as another refinance is highly unlikely given the favorable current rates.
Whatever the reason for the development, those looking for a home, or hoping to refinance in this price range won’t want to miss this opportunity. As one loan officer at a “luxury mortgage” company told CNN Money: “Never in my memory have jumbo loans been such a bargain.”
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