Brenda: “Throughout the year, we do have, strangely enough, investment loans that are lower in interest rates than second home loans right now.”

Avery: “Really?”

Brenda: “Yeah, with top-tier credit, which is 760 or higher, it’s currently at 6.99% with 20% down. And then, with 15% down, if it’s with the 760 or higher credit score, it’s at 7.36.”

Avery: “Interesting. I think it was around 3 or 4% before, wasn’t it?”

Brenda: “Yeah, and with second homes, the interest rate for 20% down is about the same, around 7.625%, so it’s a little odd. I guess people are realizing, you know, that you’re allowed to rent out your second home even if you’re not occupying it. So a lot of people are doing that because it’s a lesser down payment option.”

Avery: “Yeah, I think what the secondary markets have been doing, and with Fannie Mae and Freddie Mac, they’re like, ‘Okay, we know that they’re probably going to rent this out anyway.'”

Brenda: “Exactly. So they’re trying to make the investment loans more attractive than the second home loans. They’re just getting an investment, but they can still stay there if they want to. They’re not… You know, it’s going to be easier to sell to the secondary market, so that’s what I think their thoughts are behind it.

And then, their rates have gone down tremendously. I believe the same time last year, we were at that 8.5% range with top-tier credit, and right now, we are at 7.42%. So it’s gone down about a point since last year in the summertime.

Without the Fed decreasing rates—and we can talk about that in a little bit—but that’s where current rates are as of now.”