the 5.3% savings rate I’m referring to are from the online banks. They all range between 5.1-5.4%. So I don’t think it’s aggressively high. I might be off base w/ the mortgage rate though. I got that off Zip Realty and a recent loan application I made and they ran my credit. Anything great than savings rate has risk, so no, you can’t get 10% with no risk.
But riddle me this, let say you have to circumstance, one is putting the whole 400k in the down payment and one don’t. Lets assume that the mortgage payment is 5k/month for the one that did and 7k/month for the one that don’t. The house dropped 400k but this person got a fixed loan so he/she doesn’t care and will be staying put for a long while. If this person happen to lose his/her job and not enough cash to may for everything, which situation would you like to be in. With the person w/ 400k in cash, you can draw down that cash while you wait to find another job while the person w/out 400k will have to sell since he/she can’t refinance and the equity is all gone or the rate is at a point where he/she can’t qualify for the new loan. That’s why I think having liquid cash is a better idea for life’s unexpected moments.
