Imagine financing a home purchase with a no-interest mortgage. You probably never would want to move again. Granted, it is doubtful that you will ever have that luxury. But if rates continue to drop, as some in the mortgage industry suggest they may, mortgage rates could inch in the direction of 0%. The Federal Reserve’s recent indication that it is willing to take extradordinary steps to keep the economy growing and continued concerns of deflation may also put pressure on mortgage rates. “So long as the Fed allows the word ‘deflation’ to get bandied about, mortgage rates will ease lower,” said Dan Green, a loan officer with Waterstone Mortgage in Cincinnati. How much lower? “In theory, the only stopping point there is is 0%—that’s where all nominal interest rates have to stop,” said Mike Larson, real-estate analyst for Weiss Research.
Zip, Zero, Zilch: chance of 0% mortgages
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