Understanding cheap mortgages meaning and financial benefits

Strategies to Qualify for or Negotiate Cheaper Mortgages

Improving Credit Scores to Access Lower Interest Rates

Key Steps to Enhance Creditworthiness
Credit bureaus (Experian, Equifax, TransUnion) assess five factors: payment history (35%), credit utilization (30%), length of credit history (15%), credit mix (10%), and new credit inquiries (10%). Targeting these areas yields measurable improvements.

1. Pay Down High-Utilization Credit Cards
   Credit utilization ratios above 30% (e.g., $5,000 balance on a $10,000 limit) signal financial strain. Aim for <10% utilization by either reducing balances or requesting higher limits. For example, a borrower with a 720 score might see a 0.75% rate drop by lowering utilization from 40% to 10%.
2. Dispute Inaccuracies on Credit Reports
   Errors such as duplicate accounts, late payments incorrectly reported, or outdated collections can drag scores down. Submit disputes via the Consumer Financial Protection Bureau (CFPB) template or directly with credit bureaus. A 2023 CFPB study found that 20% of consumers identified errors leading to score improvements of 20–100 points.
3. Build Credit History with Strategic Accounts
   Opening a secured credit card or becoming an authorized user on a well-managed account can extend credit history. For instance, a borrower with a 650 score might gain 30–50 points within 6–12 months by adding a 2-year-old credit line.
4. Avoid New Credit Inquiries Before Application
   Multiple hard inquiries (e.g., for auto loans or store cards) within 12 months can reduce scores by 5–10 points. Bundle applications (e.g., mortgage + car loan) within a 14–45-day window to count as a single inquiry.
5. Leverage Credit Mix and Age
   A diverse credit portfolio (e.g., mortgage, auto loan, student loan) and older accounts (average age >10 years) improve scores. For example, a borrower with a 680 score might reach 740 by keeping a 15-year-old student loan active and adding a 5-year auto loan.

Refinancing to Convert Expensive Mortgages into Cheaper Ones

Optimal Conditions for Refinancing

Refinancing is most cost-effective when:
1. Interest rates fall by ≥1% below the current rate (e.g., from 7% to 6%).
2. Home equity reaches ≥20% to avoid private mortgage insurance (PMI).
3. Remaining loan term is ≥10 years to justify closing costs (2–5% of loan value).
4. Credit score improves by ≥20 points since the original loan.

1. Calculate Break-Even Point
   Use the formula:
   Break-Even (Months) = (Refinance Costs) / (Monthly Savings)
   Example: $6,000 closing costs ÷ $200/month savings = 30 months to recoup costs.
2. Compare Loan Types
   
3. Rate-and-Term Refinance: Lower rate or shorter term (e.g., 30-year → 15-year).
4. Cash-Out Refinance: Access equity for renovations (rates may be higher).
5. Streamline Refinance: Simplified process for FHA/VA loans (lower costs).
6. Lock in Rates During Favorable Windows
   Monitor the 10-Year Treasury Yield (correlates with mortgage rates). Refinance when yields drop below the borrower’s current rate by 0.75%+.
   Historical Example: In 2020, rates fell from 3.5% to 2.75% during the pandemic, saving borrowers $250+/month on a $300,000 loan.
7. Negotiate Closing Costs
   Request lender credits (e.g., 1% of loan value) to offset fees. Some lenders waive origination fees for high-net-worth borrowers or repeat customers.
8. Avoid Overpaying for Appraisals
   Use automated valuation models (AVMs) or hybrid appraisals (combining AVM + limited inspection) to reduce costs by 30–50%.

Negotiation Tactics with Lenders to Reduce Loan Costs

Pre-Negotiation Preparation

Before engaging with

Regional and Demographic Disparities in Cheap Mortgage Access

Affordable mortgage access varies significantly across geographic regions and demographic groups due to structural economic, social, and policy factors. While low interest rates and favorable market conditions may reduce borrowing costs in certain areas, systemic barriers—such as income inequality, racial wealth gaps, and urban-rural price disparities—create uneven opportunities for homeownership. This section examines how location and demographic characteristics influence the availability and perceived affordability of mortgages, with a focus on empirical data and cultural influences that shape borrowing behavior.

Geographic Variations in Mortgage Affordability

Mortgage costs differ sharply between urban, suburban, and rural areas due to variations in property prices, local economic conditions, and lender competition. In rural regions, lower property values and reduced demand often result in more favorable loan-to-value (LTV) ratios, enabling borrowers to secure cheaper mortgages relative to income. Conversely, high-demand urban markets—particularly in coastal cities—experience inflated home prices, pushing mortgage costs beyond the reach of middle- and low-income households despite competitive interest rates.

Key regional disparities include:

Rural vs. Urban Divide: Rural areas typically offer lower median home prices (e.g., $180,000 in Mississippi vs. $800,000+ in California), translating to lower monthly payments even with similar interest rates. However, limited lender presence and higher risk premiums may offset some savings.

State-Specific Costs: Southern and Midwestern states generally provide cheaper mortgage access due to lower home prices and slower appreciation rates, while Northeastern and Western states face higher barriers due to expensive real estate markets.

Metropolitan vs. Non-Metropolitan: Suburban sprawl in metro areas (e.g., Atlanta, Dallas) often presents more affordable entry points than dense urban cores, though commuting costs can erode savings.

Median Mortgage Cost as % of Income by Region (2023 Estimates)
Source: Federal Reserve Economic Data (FRED), Zillow Home Value Index (ZHVI)

Rural Midwest: ~18% of median income (e.g., Iowa, Nebraska)

Suburban South: ~22% of median income (e.g., Texas, Florida)

Urban Northeast: ~35%+ of median income (e.g., New York, Boston)

Coastal West: ~30–40% of median income (e.g., California, Washington)

Demographic Barriers to Affordable Mortgages

Income levels, racial/ethnic backgrounds, and age cohorts experience distinct challenges in accessing cheap mortgages due to historical discrimination, wealth accumulation disparities, and generational financial constraints. Millennials, for instance, face higher student debt burdens, while retirees may struggle with fixed incomes and stricter lender age limits. Racial wealth gaps—rooted in redlining, predatory lending, and employment discrimination—further exacerbate disparities in mortgage affordability.

Systemic factors by demographic group:

Income-Based Disparities:

Households earning below 80% of the area median income (AMI) often qualify for below-market-rate mortgages through programs like FHA loans or USDA rural housing, but these come with higher upfront costs (e.g., mortgage insurance premiums).

Low-income borrowers in high-cost areas (e.g., Los Angeles, San Francisco) may spend 40–50% of income on housing, leaving little room for mortgage rate fluctuations.

- Racial and Ethnic Inequities:

Black and Hispanic borrowers are 2–3 times more likely to be denied conventional mortgages than white borrowers, per the Urban Institute, due to lower credit scores tied to wealth gaps.

Predatory lending practices in minority neighborhoods historically inflated mortgage costs, though modern regulations (e.g., Dodd-Frank Act) have reduced—but not eliminated—these risks.

Example: In 2022, Black homebuyers in Chicago paid $12,000 more on average for homes than white buyers with similar incomes, per a National Association of Realtors study.

- Age-Related Challenges:

Millennials (Gen Y): High student loan debt (average $30,000+) reduces savings for down payments, pushing reliance on higher-LTV loans with higher rates. Only 43% of millennials own homes vs. 70% of Baby Boomers, per Pew Research.

Retirees: Fixed incomes limit refinancing options, and lenders often impose age-based restrictions (e.g., no loans beyond age 70–75). Reverse mortgages offer alternatives but accrue debt over time.

Young Professionals (Gen Z): Entry into the job market coincides with peak home prices, requiring 20–30% down payments—a barrier for those prioritizing education or career stability.

Cultural and Structural Influences on Perceived Mortgage Affordability

Cultural attitudes toward homeownership—such as the prevalence of multi-generational households, rental preferences, or distrust of financial institutions—shape how different communities perceive and pursue cheap mortgages. In some cultures, homeownership is a collective goal (e.g., shared equity among family members), reducing the need for individual mortgages. Conversely, systemic distrust (e.g., among Black and Latino communities) may delay engagement with lenders despite favorable terms.

Cultural and structural factors:

Multi-Generational Living:

In Asian and Hispanic households, 20–25% live multi-generationally, pooling resources to afford larger homes or down payments, per the U.S. Census.

This reduces individual mortgage burdens but may limit access to first-time buyer programs designed for single households.

- Rental Market Preferences:

Urban millennials in cities like New York or Seattle prioritize renting due to high opportunity costs (e.g., $500/month for a studio vs. $2,500/month for a mortgage). This delays wealth accumulation but avoids debt.

Example: In San Francisco, the median rent ($3,800/month) is cheaper than the median mortgage ($4,500/month), discouraging homeownership despite lower interest rates.

- Distrust of Financial Institutions:

Black and Latino borrowers are 50% more likely to avoid banks due to historical abuses (e.g., subprime lending crisis), per a Federal Reserve Survey of Consumer Finances.

Alternative lending (e.g., credit unions, community banks) may offer cheaper rates but lack the scale of traditional mortgages.

- Policy and Program Awareness:

Many eligible borrowers (e.g., veterans, teachers) underutilize low-interest programs like VA loans (0% down) or state-specific first-time buyer grants due to lack of outreach.

Example: California’s CalHFA program offers 30-year fixed rates 1% below market, but only 12% of eligible applicants participate annually.

Median Mortgage Costs by State: Adjusted for Local Income and Property Values

The following table compares median mortgage costs (principal + interest) as a percentage of median household income across U.S. states, adjusted for property values and local economic conditions. Data reflects 2023 averages, with rates sourced from Freddie Mac and income data from the U.S. Bureau of Labor Statistics.

Risks and Pitfalls of Pursuing Cheap Mortgages

Ultra-low mortgage rates often serve as a powerful incentive for homebuyers, promising immediate financial relief or affordability. However, the pursuit of "cheap" mortgages introduces significant risks, particularly when borrowers prioritize short-term savings over long-term financial stability. These risks manifest in adjustable-rate structures, predatory lending tactics, and unforeseen economic shocks that can transform a seemingly advantageous loan into a crippling debt burden. Understanding these pitfalls is critical for borrowers to make informed decisions and avoid costly missteps.

Trade-offs of Ultra-Low Introductory Rates in Adjustable-Rate Mortgages (ARMs)

Adjustable-Rate Mortgages (ARMs) frequently offer below-market introductory rates, often fixed for 3, 5, 7, or 10 years before adjusting annually or monthly. While this can result in lower initial payments, the long-term implications depend on market conditions and borrower risk tolerance. The primary trade-off lies in the rate adjustment mechanism, where payments can spike significantly if interest rates rise post-introduction. Historical data from the Federal Reserve demonstrates that ARM borrowers who refinance into fixed-rate mortgages during rate hikes often face payment increases of 20–50% within 5–7 years, eroding initial savings.

Key considerations for ARM borrowers:

Rate Caps and Floors: Some ARMs include lifetime caps (e.g., 12% max) or floors (e.g., 1% min), but these do not eliminate risk. A 5/1 ARM with a 2% initial adjustment cap could still double payments if rates rise sharply after the fixed period.

Negative Amortization: Certain ARMs (e.g., option-ARM loans) allow payments below interest accrual, leading to negative amortization, where the loan balance grows over time. Borrowers may face a balloon payment—a lump sum due at the end of the term—exceeding the original principal.

Refinancing Costs: If rates rise, borrowers may seek to refinance into a fixed-rate mortgage, incurring closing costs (2–5% of loan value) and potential credit score impacts.

Example: A borrower secures a 5/1 ARM at 3.5% (fixed for 5 years) with a 2% annual adjustment cap. If rates rise to 7% in year 6, their payment could jump to $1,200/month from an initial $800, assuming a $250,000 loan. Without refinancing, they may struggle to sustain the increased burden.

Predatory Lending Practices Disguised as "Cheap" Mortgages

Some lenders exploit borrowers’ desire for low rates by embedding hidden fees, unfavorable terms, or exploitative structures under the guise of affordability. Predatory practices often target vulnerable populations, including first-time buyers, low-income households, or those with poor credit. Common tactics include:

1. Balloon Payments
Lenders offer low initial rates but require a full principal repayment (e.g., 70% of the loan) at the end of the term (typically 5–7 years). Borrowers may default if they cannot refinance or sell the home, leading to foreclosure. The Consumer Financial Protection Bureau (CFPB) reports that balloon loans disproportionately affect rural and minority communities, with default rates 3–4 times higher than traditional mortgages.

2. Equity Stripping
Lenders approve loans exceeding a property’s value, assuming the borrower will refinance later. If home values decline or the borrower’s income drops, they may face negative equity (owing more than the home is worth), making refinancing impossible. The 2008 financial crisis revealed that subprime lenders used this tactic aggressively, contributing to 1 in 4 foreclosures in high-risk loans.

3. Packing Fees into "Discounted" Rates
Some lenders advertise "cheap" mortgages but offset the savings with excessive origination fees, prepayment penalties, or high mortgage insurance premiums. For example, a lender may offer a 3.25% rate but charge $10,000 in fees, making the effective cost 4–5% higher than a standard loan.

Red Flags to Watch For:

Unusually low rates compared to market averages (e.g., 2% below the prime rate).

Pressure to act quickly without time for comparison shopping.

Lack of transparency in loan terms, such as vague adjustment schedules or undisclosed prepayment penalties.

Lender reliance on income without asset verification, a hallmark of subprime lending.

Case Study (2012 CFPB Enforcement Action):
A lender marketed "teaser rates" of 2.99% on ARMs but included $15,000 in hidden fees per loan. When rates adjusted to 8.5% after 5 years, borrowers faced payments 60% higher than projected, with 40% defaulting within 2 years.

Economic Downturns and Job Loss: How "Cheap" Mortgages Become Burdens

A mortgage’s affordability hinges on stable income and economic conditions. When unemployment rises or property values decline, even a "cheap" loan can become unsustainable. Below is a textual flowchart illustrating the cascading effects:

1. Initial Assumption: Borrower secures a low-rate mortgage (e.g., 3% ARM) based on current income and home value.
2. Trigger Event: Job loss, industry downturn, or health crisis reduces income by 30–50%.
3. Payment Shock:

If on a fixed-rate mortgage, the borrower may struggle with 28–36% of income going to housing (the conventional debt-to-income threshold).

If on an ARM, the adjusted rate (e.g., 6–7%) pushes payments to 40–50% of reduced income.

4. Refinancing Barriers:

Credit score drops (due to late payments or collections) disqualify the borrower from new loans.

Home value declines (e.g., 20% drop in a recession), leaving them underwater (owing more than the home is worth).

5. Foreclosure Risk:

Lenders initiate foreclosure if payments miss 3–6 months, even if the borrower later regains income.

Strategic defaults (walking away) worsen credit scores and may trigger legal action.

Real-World Impact Data:

2008 Financial Crisis: Borrowers with ARMs or subprime loans faced foreclosure rates 5x higher than prime fixed-rate borrowers (Federal Reserve, 2010).

COVID-19 Pandemic (2020–2021): Unemployment spiked to 14.8%, leading to $7.8 billion in mortgage delinquencies (Mortgage Bankers Association). ARM borrowers with <20% equity were 3x more likely to default.

Case Study (2008 Subprime Crisis):
A family took a 2/28 ARM at 4.5% in 2006, expecting to refinance before the rate adjusted. When unemployment hit 10% in 2008, their payment jumped to $2,200/month (from $1,200). With no equity and a 30% income drop, they lost the home in 18 months, despite later finding stable work.

Hidden Penalties and Negative Amortization in "Cheap" Mortgage Structures

Some lenders design loans to appear affordable upfront while embedding clauses that penalize borrowers for paying off debt early or maintaining payments. These include:

1. Prepayment Penalties
Certain loans charge 2–5% of the remaining balance if the borrower refinances or pays off the loan within the first 3–5 years. This is common in jumbo loans or non-QM (non-qualified mortgage) products. For example:

A borrower refinances after 2 years to a 3% rate, saving $200/month but paying a $15,000 penalty on a $300,000 loan.

Regulatory Note: The Dodd-Frank Act (2010) limits prepayment penalties to 3% of the loan balance for the first 3 years, but some lenders still exploit loopholes.

2. Negative Amortization Loans
Loans like the Option ARM allow borrowers to make minimum payments (often covering only interest), causing the principal to grow. If unchecked

Alternative Financing Models for Lower-Cost Homeownership

Alternative financing models present viable pathways to homeownership for individuals who face barriers under traditional mortgage structures, such as high down payments, credit constraints, or income volatility. These models often reallocate financial risk, leverage shared resources, or integrate non-conventional repayment mechanisms to reduce upfront and ongoing costs. While they may introduce unique legal, financial, or operational complexities, their adoption has grown alongside evolving consumer needs and technological innovation. Below, comparisons with traditional mortgages, cost structures, and risk-benefit analyses are examined across shared equity, lease-to-own, employer-assisted programs, and disruptive digital models.

Comparison of Traditional Mortgages with Alternative Financing Models

Traditional mortgages—fixed-rate or adjustable-rate loans—rely on borrower creditworthiness, collateral value, and market interest rates to determine affordability. In contrast, alternative models redistribute financial burdens or ownership stakes to mitigate individual costs. For example:

Shared Equity: A third-party investor (e.g., government-backed programs like the UK’s Help to Buy: Shared Ownership) purchases a portion of the home, reducing the borrower’s mortgage size but requiring future repayment or equity sharing.

Lease-to-Own (Rent-to-Own): Renters pay a portion of monthly payments toward a future down payment, with the option to purchase the home after a set term (typically 3–5 years). The effective cost includes both rent and equity accumulation, often exceeding traditional mortgage payments but offering flexibility for credit-challenged buyers.

Co-Ownership Arrangements: Multiple parties (e.g., family members, investors, or co-borrowers) jointly own the property, splitting mortgage payments, maintenance costs, and equity. This model is common in multi-generational households or among friends pooling resources.

Cost Structure Comparison:

State	Median Home Price (USD)	Median Interest Rate (2023)	Median Monthly Mortgage (P&I)	Median Household Income (USD)	Mortgage as % of Income	Key Affordability Factor
Mississippi	$175,000	6.5%	$1,150	$48,000	18.5%	Low property taxes, high FHA loan penetration
Texas	$320,000	6.8%	$2,050	$65,000	24.2%	No state income tax, but high insurance costs in hurricane-prone areas
California

Model	Upfront Costs	Ongoing Costs	Equity Growth	Exit Flexibility
Traditional Mortgage	3–20% down payment + closing costs	Fixed/adjustable interest + principal	Full ownership over time	High (refinance/sell)
Shared Equity	Lower down payment (e.g., 5–10%)	Reduced mortgage + shared equity payments	Partial ownership; future buyout required	Moderate (dependent on investor terms)
Lease-to-Own	Option fee (1–5% of home price) + rent credit	Higher rent (portion applied to down payment)	Delayed full ownership	Low if option expires
Co-Ownership	Split down payment + legal agreements	Shared mortgage/maintenance costs	Proportional equity	High (if co-owners agree)

Key Trade-Off:

Traditional mortgages offer simplicity and full ownership but require strong credit and savings. Alternatives like shared equity or lease-to-own reduce barriers but may limit long-term flexibility or incur higher total costs. Co-ownership balances risk but demands high coordination among parties.

Rental Assistance and Employer-Sponsored Housing Programs

Government-subsidized rental assistance and employer-provided housing reduce the effective mortgage burden for specific demographics, including low-income households, essential workers, or employees in high-cost areas. These programs often operate as:

Subsidized Rent-to-Own: Partnerships between nonprofits and developers (e.g., Habitat for Humanity’s shared equity models) offer below-market rent with a path to ownership after 5–7 years.

Employer Housing Stipends: Companies in tech hubs (e.g., Google’s housing grants for employees in San Francisco) or rural areas (e.g., agricultural cooperatives) provide direct financial aid, tax-free stipends, or below-market loans to retain talent.

Public Housing Conversion Programs: Cities like Toronto’s Adaptive Reuse initiative repurpose subsidized housing into condominiums with deferred equity structures, targeting first-time buyers.

Cost Reduction Mechanisms:

• Income-Based Subsidies: Programs like the U.S. Low-Income Housing Tax Credit (LIHTC) cap rent at 30% of household income, effectively reducing the mortgage-equivalent cost for participants.
• Employer Matching: Some firms (e.g., Facebook’s housing assistance in Seattle) match down payment savings from employees’ 401(k) accounts, reducing the upfront burden by 50–100%.
• Deferred Payment Loans: Nonprofit lenders (e.g., Self-Help Credit Union) offer 0% interest loans with payments deferred until retirement, making homeownership viable for fixed-income groups.
• Tax Incentives: Countries like Australia’s First Home Owner Grant (FHOG) or Canada’s Home Buyers’ Plan (HBP) provide direct grants or tax deductions, lowering the net cost of entry.

Eligibility and Limitations:

These programs target specific groups (e.g., income thresholds, employment status) and often require long-term commitments. For example, LIHTC units may impose occupancy restrictions for 15+ years, while employer aid is typically tied to job tenure. Misalignment between program rules and borrower needs can lead to unintended financial strain.

Pros and Cons of Creative Financing Options

Non-traditional financing—such as seller financing, portfolio loans, or private mortgages—can lower costs but introduce higher risks. Below is a structured analysis by model:

Seller Financing (Contract for Deed)

• Pros:
  • No bank approval required; flexible terms for sellers willing to act as lenders.
  • Lower closing costs (no lender fees) and potential for interest-only payments.
  • Attractive for buyers with poor credit or non-traditional income (e.g., freelancers).
• Cons:
  • Seller retains title until full repayment, risking foreclosure if the buyer defaults.
  • Limited recourse: Buyers may lose equity but not face personal liability (varies by state).
  • Harder to sell or refinance mid-term due to lack of clear title.
• Suitability: Ideal for rural areas or cash-rich sellers; less common in urban markets with strict lending laws.

Portfolio Loans (Bank-Owned Mortgages)

• Pros:
  • Higher loan-to-value (LTV) ratios (up to 90–100%) and flexible underwriting for borrowers with non-traditional profiles.
  • No private mortgage insurance (PMI) if LTV ≤ 80%, reducing monthly costs.
  • Longer lock-in periods (e.g., 7–10 years) stabilize rates in volatile markets.
• Cons:
  • Higher interest rates (1–3% above market) due to perceived risk.
  • Limited to bank customers; not transferable to other lenders.
  • Early repayment penalties may apply.
• Suitability: Best for borrowers with strong relationships with credit unions or community banks, or those needing quick financing (e.g., inherited properties).

Private Mortgages (Hard Money Loans)

• Pros:
  • Fast approval (7–14 days) and funding for distressed properties or investors.
  • Short-term (6–24 months) with high LTV (up to 75%) for fix-and-flip projects

    Securing a cheap mortgage meaning hinges on a blend of economic awareness, financial discipline, and proactive negotiation. Whether leveraging government-backed programs, optimizing credit profiles, or exploring alternative financing models, borrowers must weigh short-term savings against long-term risks. The key lies in recognizing that affordability is not static but evolves with market conditions, personal circumstances, and lender transparency. By adopting a holistic approach—balancing cost efficiency with financial resilience—homebuyers can transform the pursuit of a "cheap" mortgage into a pathway toward lasting equity and stability.

    FAQ

    What exactly does a "cheap mortgage" mean, and how is it different from a regular mortgage?

    A cheap mortgage refers to a home loan with lower interest rates, fees, or total borrowing costs compared to standard mortgages. It can mean a fixed or variable rate deal below market average, government-backed schemes (like FHA loans), or lenders offering discounts for first-time buyers or good credit scores.

    How can I find out if my current mortgage is actually cheap compared to others?

    Compare your mortgage’s annual percentage rate (APR) to the national average for your loan type (e.g., 30-year fixed). Use free tools like Bankrate’s mortgage calculator or ask a broker to analyze your fees, refinancing options, or switch to a cheaper deal (e.g., a 2-year fixed rate).

    Are cheap mortgages only for people with perfect credit scores, or can bad credit borrowers qualify too?

    Cheap mortgages aren’t exclusive to perfect credit—some lenders offer subprime loans or government-backed options (like FHA loans) with higher rates but lower upfront costs. Bad credit may limit choices, but improving your score (e.g., paying debts) or using a co-signer can help secure better terms.

    What are the biggest financial benefits of getting a cheap mortgage besides saving on interest?

    Lower monthly payments free up cash for investments, emergencies, or debt repayment. Cheaper mortgages also reduce the total interest paid over the loan term (saving tens of thousands), build equity faster, and may qualify you for tax deductions or refinancing perks like cash-out options.

    Can I switch to a cheaper mortgage if I already have a home loan, and how much does it cost?

    Yes, you can refinance to a cheaper mortgage, but costs vary—expect closing fees (1–5% of the loan) or exit penalties if breaking an early-repayment deal. Weigh savings from lower rates against fees: a rule of thumb is to refinance if you’ll save at least 0.75% on your rate and plan to stay in the home long-term.