Should I Lock In My Mortgage Early? I'm Worried About Tariffs and Economy

21 hours ago2 min read

The Truth About Interest Rates And The Economy

This is a question I'm getting a lot at the moment. And it's a good one.

"Should I lock in my mortgage early with everything that's going on with tariffs and the economy?"

My answer to locking in early: Hold the line.

I've been talking with a lot of people about this lately, and here's the truth: interest rates generally drop when the economy is struggling.

Think of the economy as a garden. When your garden is lush and growing, you keep watering it. But if it starts to get too wet or you see signs of deterioration, you reduce the water.

The water, in this case, is the money supply. How do you reduce the supply? You raise interest rates, making borrowing more expensive, so fewer people do it.

Now, what happens if you don't water your garden for too long? It starts to dry up and wilt.

So, what do you do then?

You start watering again. With interest rates, this means lowering them to make borrowing easier, encouraging more spending and investment. This helps your garden – or economy – recover and grow.

In other words, you need to decide where you think the economy stands now and where it's headed:

Is it growing robustly, not needing extra 'water'?
Or is it drying out, in need of lower interest rates to thrive?

I would say we're approaching a heat wave, and we might need all the water we can get. In other words, rates might be much lower over the next year.

For most of my clients and people I'm chatting with, this tends to help. I hope it helps you, too and gives you some clarity.

TL;DR:

Interest rates generally decrease when the economy is weak to encourage borrowing and spending.
Assess the current economic climate: if it's robust, high rates might persist; if it's weakening, expect lower rates.
Consider waiting to lock in your mortgage if you anticipate an economic downturn, as rates could drop further.