Borrow like Buffett
To shore up the faltering economy, the Federal Reserve in mid-March slashed a key interest rate nearly to zero, matching an all-time low it established during the 2008 financial crisis and the Great Recession.
Buffett hasn't figured out a way to borrow at zero interest (at least not yet), but his Berkshire Hathaway company did come close as it recently capitalized on the low-rate environment the Fed helped create.
In a filing last month with U.S. regulators, Berkshire said that through a bond offering priced in Japanese yen, it would be taking on the equivalent of over $1.8 billion in debt — at rates ranging from 2% to just 0.674%.
You won't find mortgage rates way down in that neighborhood, but they have been breaking records thanks to the Fed's extreme rate cutting and its other moves to help the economy. Thirty-year fixed-rate mortgages have just begun popping up with unbelievably low rates below 3%.
During a 2017 CNBC interview, Buffett called the 30-year mortgage "the best instrument in the world" — because of your ability to refinance when you find a lower rate.
"If you’re wrong and rates go to 2%, which I don’t think they will, you pay it off," he said at the time. "It’s a one-way renegotiation. It is an incredibly attractive instrument for the homeowner and you’ve got a one-way bet."
If you're considering a refinance, use the calculator below to see how you could cut your monthly payment with one of today's low rates.
Still on the fence? Jump off
Many households have seized upon the sliding rates on home loans. During some recent weeks, Americans were applying for refinance mortgages at three and four times the levels seen a year ago, according to the Mortgage Bankers Association.
"With many homeowners still facing economic and employment uncertainty, these refinance opportunities will allow them to save money on their monthly payments, which can then be used to help other areas of their budgets," says Joel Kan, the trade group's vice president of forecasting.
LendingTree estimated earlier this spring that homeowners who refinanced mortgages taken out just one year ago would save an average of roughly $60 a month for every $100,000 borrowed.
Still waffling? You're in a good position to refinance and score a sensationally low mortgage rate if you currently have a 30-year mortgage at 4% or higher and if your credit score is exceptional (800 or higher) or very good (740 to 799).
Warren Buffett says it's a good time to borrow money. Maybe it's your time to dramatically cut the cost of your mortgage.
Take a look at today's best refinance rates where you are: