The Top 3 Things Millennials Should Do Now to Take Advantage of Low Interest Rates
Rates may not be this low again in decades, so it could pay to lock them in for the long term.


We’ve been in an era of historically low interest rates for several years, but rates are beginning to rise.
Most Millennials can’t remember a time when interest rates weren’t in the single digits, but the reality is that today’s interest rates are abnormally low. Dare I say, today’s rates are something that most people might see only once or twice in their lifetime.
As the Fed signals its commitment to keep raising rates, there’s no telling how high they will actually go. One thing is for certain, though: Your time to take advantage of low interest rates could be soon coming to an end.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
There are a number of things Millennials can consider doing in an effort to make the most of today’s low interest rate environment and set yourself up for future financial success.
1. Lock in your mortgage rate.
The average age of a first-time homebuyer is 30.1, according to Ellie Mae Millennial Tracker. If you’re a Millennial who has been unsure of whether to take the leap into homeownership and are in a position to buy, now is the time to get serious about it.
Even if you haven’t found your dream home, there are advantages to buying a starter home or condo over the next 12 to 18 months, simply because you can lock in a lower mortgage rate.
Mortgage rates currently are hovering around 4.5%. Let’s compare that to the highest mortgage rate in relatively recent history, which was 1981: 18.45%. Ask your parents and older family members about mortgage rates when they bought their first homes and prepare to be amazed.
Let’s say you were thinking about buying a house for $200,000 today with an interest rate of 4.5%. Your mortgage payments (principal and interest only) would be $1,013 per month assuming a 30 year mortgage. But if you decided to wait, by the time you’re finally ready to buy, say the rates had gone up to 7%. That same $200,000 house would now cost you $1,331 per month.
2. Refinance your student loans.
There are two purposes for refinancing your student loans.
First, many students have multiple loans and make multiple payments. If you refinance, you have the potential to consolidate your different loans at one single rate. In some cases, you might even be able to shave off years from the lifecycle of a loan.
Second, refinancing could help you achieve a lower monthly payment. Depending on when you graduated, the rate that you were given could be higher than rates now. It never hurts to take a look at those rates and see if you can reduce how much you’re paying in interest.
One thing to keep in mind when refinancing student loans is that certain protections exist for government student loan debt for cases when your income isn’t high enough to repay or if you lose your job. These protections continue to change over time but they generally exist for government student loans, not private student loans. Although refinancing and consolidating your student loans could lower your monthly payment, it could also disqualify you from certain protections.
3. Invest in stocks.
In a low interest rate environment, the cost of borrowing for everybody is lower — including corporations.
When a corporation has a low cost of borrowing, the company is theoretically able to grow at a quicker and easier pace. For investors, that means the company’s stock price could increase.
Not only could the company’s stock price increase rapidly, but the company may pay higher dividends to shareholders because its balance sheet is healthier.
If you’re about to enroll in your company’s 401(k) plan for the first time and are unsure of how to allocate your portfolio, it may make sense to overweight equities. First, as a Millennial, you likely have the benefit of time on your side, as you’re unlikely to be retiring in the next few years and can withstand the relative risk associated with equities.
Generally, it makes sense to look at companies in the growth sector, as those are the ones that will be most inclined to borrow money to finance their expansion plans. That being said, in a low interest rate environment, even companies that don’t need to borrow may do so because the cost of borrowing is so low. This provides added flexibility for companies and greater potential for investors to experience growth.
An honorable mention to this list is to call your credit card company and see if you can negotiate or lock in a better rate.
Regardless of your financial health and future plans, there are ways to take advantage of today’s low interest rates. Remember that we are unlikely to see such historically low rates again soon — or possibly ever again in our lifetime — so the decisions you make now can positively impact your long-term goals.
The material presented in this article is of a general nature and does not constitute the provision by PNC of investment, legal, tax or accounting advice to any person, or a recommendation to buy or sell any security or adopt any investment strategy. Opinions expressed are subject to change without notice. The information was obtained from sources deemed reliable. Such information is not guaranteed as to its accuracy. You should seek the advice of an investment professional to tailor a financial plan to your particular needs.
Securities are not bank deposits, nor are they backed or guaranteed by PNC or any of its affiliates, and are not issued by, insured by, guaranteed by, or obligations of the FDIC, the Federal Reserve Board, or any government agency. Securities involve investment risks, including possible loss of principal.
Learn more at www.pnc.com.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

As a Vice President and an Investment Market Director in the Southeast market for PNC, Justin Sullivan provides investment leadership in the creation and implementation of investment strategies. Justin also serves as an investment adviser for complex accounts. Justin works with a team of investment advisers, specialists in financial and estate planning, trusts and banking services to help clients achieve their financial objectives.
-
Amazon Ends Free Shipping Benefit Sharing with Non-Household Members
Starting October 1, Prime members will no longer be able to share shipping perks with those outside their household.
-
Big Tech Names Rise Above Broad Weakness: Stock Market Today
Some familiar names enjoyed solid rallies on the resolution of outstanding questions, but macro uncertainty hangs over the broader market.
-
More Than Money: The Hidden Toll of Financial Abuse of Older Adults
Financial abuse from schemes involving tech support, government impostors, false sweepstakes, grandchild hoaxes and online shopping issues can cause thousands of dollars in losses.
-
I'm a Financial Planner: Here Are Three High-Impact Ways to Make a Difference With Your Dollars
The world often feels out of control, but here are three ways to use your money — through investments, charitable giving and political donations — to help create a more just and sustainable future.
-
The Unsung Hero of Aisle 5: A Tale of Forgotten Change and Compassion at the Supermarket
This supermarket manager went above and beyond to help when a child forgot her change at the checkout counter. You might be surprised at some of the complications that supermarkets face when it comes to customers' forgotten change.
-
Train, Integrate, Retain: A Strategic Playbook for Adviser Onboardings
Build a thriving practice by training new advisers with clear goals, structured processes and consistent mentorship for strong team growth.
-
I'm a Financial Professional: Here Are Four Ways You Can Use Debt to Build Wealth
Using debt strategically, such as for homeownership, education and more, can lead to greater financial stability and growth.
-
Five Key Wake-Up Calls for Ambitious Business Owners, From a Biz Specialist
Your personal financial plan needs to include a formal exit strategy for your business, or you could be in trouble.
-
I'm a Retirement Psychologist: Here's Why Doing What You 'Ought' in Retirement Beats Doing Whatever You Want
True retirement freedom isn't about simply doing whatever you want, but about finding purpose and direction through commitments that align with your deepest values and allow you to contribute meaningfully.
-
Tactical Roth Conversions: Why 2025-2028 Is a Critical Window for Retirees
The One Big Beautiful Bill (OBBB) extended today's low tax brackets, but they may not last. Here's how smart planning now can prevent costly tax surprises later.