Mortgage rates explained for newbies
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┣ 🧵 What it is
┃ ┣ Borrow $400k → bank charges % per year
┃ ┣ 1% difference = $80k+ extra over 30 years
┃ ┗ Rate ≈ 10yr Treasury yield + lender spread (1.5–2.5%)
┃
┣ 🧵 What moves rates
┃ ┣ NOT the Fed (common mistake)
┃ ┣ 10-year Treasury bond → the real boss
┃ ┣ Inflation up → rates up
┃ ┗ Recession fear → bonds rally → rates down
┃
┣ 🧵 Your rate depends on
┃ ┣ Credit score → 760+ gets best rate
┃ ┣ Down payment → under 20% = extra monthly fee
┃ ┣ Loan type → FHA / VA / Conventional / Jumbo
┃ ┗ Term → 15yr (lower rate) vs 30yr (lower payment)
┃
┣ 🧵 The math that hurts
┃ ┣ $400k at 3% → total paid: $607k
┃ ┣ $400k at 6% → total paid: $863k
┃ ┗ $400k at 8% → total paid: $1.057M
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┣ 🧵 Rate history (quick)
┃ ┣ 1981 → 18.6% (peak insanity)
┃ ┣ 2021 → 2.65% (pandemic floor)
┃ ┣ 2022-23 → 3% to 8% in 18 months
┃ ┗ 2024-26 → 6–7%. "Higher for longer"
┃
┣ 🧵 Impact on the economy
┃ ┣ Rates up → mortgages expensive → less buying → home prices drop
┃ ┣ Less buying → construction slows → jobs cut
┃ ┣ Lock-in effect → owners at 3% won't sell → supply frozen
┃ ┣ Consumer spending drops → GDP slows
┃ ┗ Banks tighten credit → ripples across ALL lending
┃
┣ 🧵 Impact on crypto
┃ ┣ Rates up → "risk-off" → investors flee to safety → BTC drops
┃ ┣ Rates down → cheap money → risk appetite returns → BTC pumps
┃ ┣ 2021 (2.65% rates) → biggest crypto bull run ever. Not a coincidence
┃ ┣ 2022 (Fed hikes) → crypto winter. Also not a coincidence
┃ ┗ Watch the 10yr yield → best leading indicator for crypto sentiment
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┗ 🧵 The traps to avoid
┣ Only checking 1 lender (check 3-5)
┣ Forgetting to lock your rate
┣ Thinking Fed cuts = mortgage cuts. They don't
┗ Focusing on monthly payment, not total cost