Nov 16, 2023
Homeowners often love to humble-brag about various aspects of their abode, from the size of their primary suite to just how many cars can fit in their garage.
But the latest boast has nothing to do with square footage and everything to do with numbers—today’s homeowners like to boast their look-how-lucky-I-got low mortgage rates.
If you missed out on the friendly mortgage rates your friends or family nailed down buying homes during the COVID-19 pandemic, join the club. Homebuyers today are feeling mortgage envy in a big way as interest rates surge to new heights.
Here’s how to deal with those who feel the need to flaunt their low mortgage rates (and how to get a rate you’ll want to show off).
Mortgage rate envy, explained
Many lucky homeowners snagged a rate of 2.65% in January 2021, but hearing about it will likely grate on the nerves of today’s buyers facing a current 23-year high of 7.57%.
Jealousy is human nature, after all.
“Envy often stems from issues related to self-worth, identity, and unmet desires or needs,” says William Schroeder, counselor and co-owner at Just Mind in Austin, TX. “How mortgage envy relates to this situation is pretty clear: The person who gets the house at a better deal is perceived as to be envied.”
In other words, your needs remain unmet while someone else’s are fulfilled.
Owners and buyers are green-ish with envy
No one will throw shade if you feel bitter that your pals scooped up a 3.5% interest rate just last year when you’re looking down the barrel at a rate twice as high.
“I absolutely have mortgage rate envy for the people who bought homes anytime before 2022,” says Carter Seuthe, CEO of Credit Summit. Seuthe’s been house shopping for a year and, to make matters worse, was outbid on two offers.
“It is easy to allow situations like this to go into a ‘compare and despair’ cycle,” says Schroeder. “We have such an abundance of data and social media tools that highlight obvious points of comparison.”
Jake Hill, CEO of DebtHammer, was on the compare and despair ride when he first learned of his friend’s variable rate.
“The introductory rate was so much lower than mine, and I almost felt like I had made a mistake choosing a fixed-rate loan,” says Hill. “However, I reminded myself that, in time, that variable rate will balance out, and their mortgage choice won’t look like such a steal.”
How to deal with a mortgage bragger
Feeling jealous of someone else’s good fortune is one thing, but when someone knows you’re house shopping and goes on (and on) about their low interest rate, it rubs salt into the wound.
“Normally, when this comes up, it’s a sign a person is looking for confirmation of self-worth,” says Schroeder. “Very often, this is rooted in an insecurity of some sort as they are trying to boost themselves up and show some superiority.”
Humble braggers might expect a high-five for their perceived shrewd wisdom and perfect timing in conquering the housing market. But it’s OK if you can barely muster up enthusiasm to congratulate them.
And Schroeder notes that not all boasting comes from a negative place. Instead, the need to show prowess might be cultural.
“Maybe someone comes from a specific background that rewards financial savvy or thrift,” says Schroeder.
How lenders deal with mortgage rate envy
So, who hears about mortgage rate envy the most? Mortgage lenders!
“We often find clients coming to us with stories of how their friends or family managed to secure lower interest rates on their mortgages,” says Alex Shekhtman, CEO and founder of LBC Mortgage in Los Angeles.
He recently had a client who was disheartened when she found out a relative had snagged a lower interest rate for their new home.
“She felt like she was missing out on something great,” says Shekhtman.
Tips to get a lower interest rate
The good news for buyers with mortgage rate envy is that lenders might be able to turn those understandably sour grapes into something less bitter.
Shekhtman’s client worked to improve her financial profile and qualified for a better rate. Here are his suggestions on how you can nab a lower interest rate.
Boost your credit score: “Lenders often reward borrowers with higher credit scores by offering more favorable rates,” says Shekhtman.
Compare multiple mortgage rate offers: “By comparing multiple offers, you increase your chances of finding a rate that aligns with your financial goals,” explains Shekhtman.
Make a bigger down payment: Putting down a chunk of change might be rewarded with a lower interest rate by a lender. Also, some FHA programs offer rates that are lower than conventional loans and with only a 3.5% down payment.
Buy mortgage points: “Some lenders let you buy mortgage points, which means you prepay interest upfront in exchange for a lower interest rate for the whole loan term,” says Shekhtman. Do the math and determine if buying points makes sense in the long run.
It’s OK to (quietly) have mortgage rate pride
But he doesn’t shout it from the rooftops.
“We do our best not to reveal our rate to friends buying a home right now,” says Kennelly. “We feel for friends who need to buy a new home right now.”
Though Kennelly does admit a private sense of pride: “My wife and I always share a wry smile for how lucky we are to have capitalized on the low rates during COVID.”