Why Warren Buffett Would Tell You It's Not Too Late to Refinance Your Mortgage

Ninety-year-old investing sage Warren Buffett would wonder what you're waiting for.

"This is a very good time to borrow money, which means it may not be such a great time to lend money, but it’s good for the country that it’s a good time to borrow money," billionaire Buffett said during his company's 2020 annual shareholders meeting, held online.

Buffett has been on something of a borrowing binge himself, and at some truly eye-popping rates. You can do pretty well, too, if you follow his lead.

Use Buffett as your role model

To shore up an economy during the onset of the coronavirus crisis, the Federal Reserve last year slashed a key interest rate nearly to zero. More recently, Fed officials signaled they'll keep rates at next to nothing until 2024.

Buffett hasn't figured out a way to borrow at 0% interest (at least not yet), but his Berkshire Hathaway holding company did come close last year as it benefited from the Fed's low-rate environment.

In April 2020, 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 a mere 0.674%.

You won't find 30-year mortgage rates way down in that neighborhood, but 30-year fixed-rate mortgages right now are averaging 3.13%. Despite recent increases, rates have almost never been this low.

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."