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  • Jan 8: 📊 Rates Tick Up to 6.21% + The 1% Rule Reality

Jan 8: 📊 Rates Tick Up to 6.21% + The 1% Rule Reality

Why 2026 makes the "1% Rule" more important than ever. Plus: The 0% APR credit card arbitrage play for savvy investors.

Author

Alex Veytsman
January 08, 2026

📬 The Lending Letter 🏠

2026 Starts With a Tick Up: Rates Edge Higher

Happy Thursday! ☕ We're officially into the second week of 2026, and if you're still recovering from holiday credit card bills, we've got some news that might make you feel better about your financial decisions. Spoiler: at least you didn't lock in a mortgage yesterday. 😅

📊 TODAY'S 30-YEAR FIXED RATE
6.21%
Up 0.02% from yesterday | Via Mortgage News Daily | January 8, 2026

🎯 The Markets Are Waking Up From Their Holiday Nap

So rates ticked up slightly today—nothing dramatic, just a little 2-basis-point bump. Think of it like when you step on the scale after New Year's and it's up a pound or two. Not ideal, but also not the end of the world. 🤷

Here's what's happening: The bond market is getting back into full swing after the holiday slowdown. Traders are digesting employment data, watching inflation signals, and generally trying to figure out what 2026 is going to look like. The result? A little volatility as everyone shakes off the eggnog haze. 🥚

📈 Early January Vibes

January is historically a bit unpredictable for rates. You've got tax refund season ramping up (which brings buyers), new year motivation (people actually following through on those "buy a house" resolutions), and lenders with fresh quotas to hit. Translation: there's action happening, and if you're in the market, you're competing with folks who are actually serious this time. 💪

💰 Lender Promos: January Deals Are Live

🏠 Need Financing for Any Property? New year, new opportunities. Whether it's a primary residence or adding to your portfolio, fill out this quick form and we'll connect you with lenders who are hungry to start 2026 strong.

🏢 Investing in 2026? Smart move. Connect with investment property specialists here who can help you structure deals that actually make sense in today's rate environment.

🏖️ Building Your STR Empire This Year? January is when serious STR investors make their moves. Talk to our STR loan specialists here who understand cashflow, occupancy rates, and how to make the numbers work.

🧠 Educational Corner: The 1% Rule for Rental Properties

Let's talk about one of the simplest—yet most powerful—screening tools for rental property investors: The 1% Rule. 🎯

Here's how it works: Monthly rent should be at least 1% of the purchase price. So if you're buying a $300,000 property, you should be able to charge at least $3,000/month in rent.

💡 Why This Matters in 2026

It's a Quick BS Detector: The 1% rule helps you quickly weed out deals that look good on paper but will bleed you dry. According to BiggerPockets analysis, properties that don't meet the 1% rule often struggle to generate positive cashflow, especially in today's higher-rate environment.

It Accounts for Reality: That 1% isn't pure profit—it needs to cover your mortgage (at 6.21%, remember), property taxes, insurance, maintenance, vacancies, and still leave you with actual cashflow. Most experts suggest you need that full 1% or higher to make the math work.

But Context Is King: The 1% rule is harder to hit in expensive coastal markets (think San Francisco, where $1M homes don't rent for $10k/month). In those cases, investors often accept 0.7-0.8% because they're banking on long-term appreciation. Meanwhile, in the Midwest and South, hitting 1-1.5% is much more achievable. 📍

2026 Reality Check: With rates at 6.21%, cashflow is tighter than when money was cheap. This makes the 1% rule MORE important, not less. Don't let a sexy property distract you from basic math. Run the numbers with our investment specialists before you fall in love with a property that'll eat your lunch. 🥪

🏘️ For STR Investors: The Hidden Season Everyone Misses

Everyone thinks STR investing is all about summer beach houses and ski chalets. But you know what market is absolutely crushing it right now? February and March destinations. 🌴

While everyone's focused on peak summer season, smart STR investors are buying NOW for these underrated windows:

1. Spring Break Markets
Properties in Florida, Arizona, and Southern California see massive demand from mid-February through April. AirDNA data shows occupancy rates spike to 85-95% in these markets during spring break windows, with nightly rates 40-60% higher than winter. Buy in January, furnish in February, print money in March. 💵

2. Festival Season Setup
Music festivals, spring sporting events, and conference season (SXSW, Coachella, Masters Golf, etc.) create massive short-term demand. Properties near these events can charge 3-5x normal rates during peak event weekends. 🎸

3. The "Escape Winter" Snowbird Market
January through March is when snowbirds rent properties for 1-3 months to escape cold weather. These longer-term STR bookings provide stable income with lower turnover costs. It's like having a tenant, but you get your property back for summer. ❄️➡️☀️

Action Items for 2026:

🎓 Personal Finance Hack: The Credit Card Arbitrage Play

💳 Using 0% APR Offers Like a Financial Ninja

Here's a move that sophisticated investors use but most people never think about: Strategic use of 0% APR balance transfer and purchase offers. Not for buying stuff you can't afford—for creating free leverage. 🧠

How It Works:

Step 1: Get a 0% APR Offer
Many credit cards offer 15-21 months of 0% APR on balance transfers or purchases. According to NerdWallet's current analysis, you can find offers with minimal or no transfer fees if you shop around.

Step 2: Move the Money Strategically
Instead of using your savings for a purchase (let's say $10,000 for home improvements, business expenses, or even paying down higher-interest debt), you put it on the 0% card. Your $10,000 stays invested.

Step 3: Let Your Money Work
That $10,000 you didn't pull from investments? At a conservative 8% annual return, it earns $800 in year one. Meanwhile, you're paying $0 in interest on the card (if you stay within the promo period). According to Bankrate's math, this can net you hundreds to thousands in arbitrage profits. 📈

Step 4: Pay It Off Before the Promo Ends
This is crucial. Set up automatic payments to have the balance cleared 1-2 months BEFORE the 0% period ends. Miss this deadline and you're hit with retroactive interest in some cases—which destroys the entire strategy. ⏰

Real-World Application:

  • Property Improvements: Need to renovate a rental? Use a 0% card, keep your cash earning returns, pay it off methodically. Or better yet, combine with our 0% furnishing partner for even more leverage.
  • Emergency Fund Alternative: Keep your emergency fund fully invested, use 0% credit as your backup. Forbes suggests this works well for disciplined borrowers.
  • Business Expenses: Float business costs on 0% cards while keeping operating capital deployed in your business earning returns.

The Catches:

  • ⚠️ Requires Discipline: This strategy fails spectacularly if you miss payments or go past the promo period
  • ⚠️ Impacts Credit Utilization: High balances can temporarily ding your credit score (though it recovers when paid off)
  • ⚠️ Not For Spending Money You Don't Have: This is arbitrage, not a license to buy things you can't afford

Bottom Line: Used responsibly, 0% APR offers are essentially free short-term loans. In a world where money costs 6.21% for a mortgage and 8-25% for most other debt, free money is worth paying attention to. Just don't be the person who gets seduced by "free money" and forgets about the payment deadline. 🎯

📊 Market Intel: What's Actually Moving in January

Let's talk about what's really happening in the market right now:

Inventory: Still Low, But Improving
We're starting 2026 with more listings than we had last January, but it's still not exactly a buyer's paradise. Realtor.com data shows inventory up about 15-20% year-over-year, which sounds great until you realize we're comparing to historically low levels. It's like celebrating that your diet is working because you only ate one entire pizza instead of two. Progress, but... 🍕

Buyer Competition: Heating Up
The "wait and see" crowd from Q4 2025 is starting to jump in. New year energy is real, and people who spent December "just browsing" are now writing offers. If you're shopping, expect more competition than you saw in November and December. 🥊

The Refinance Window
Here's something interesting: With rates hovering in the low 6% range, we're seeing a small uptick in refinance activity from people who locked in at 7%+ last year. According to MBA data, even a 0.75% drop can save significant money over the life of a loan. Not exactly a refi boom, but definitely movement. 💸

🎯 The "Should I Wait?" Question

Since it's early January, everyone's asking this: "Should I wait to see if rates drop more in 2026?"

Here's the honest answer: Nobody knows. The Fed might cut rates. Or they might not. Or they might cut but mortgage rates don't follow. Freddie Mac research shows that mortgage rates and Fed rates don't move in lockstep like most people think. 📊

But here's what we DO know:

The Opportunity Cost is Real
Every month you wait is another month of rent with zero equity building. Another month of not taking advantage of tax deductions. Another month of missing out on depreciation benefits if you're investing. ⏰

You Can Always Refinance
This is the part people forget. If rates drop significantly, you can refinance. But if you wait and prices climb 5-10% while you're waiting for a 0.5% rate drop, you've actually lost money. Math is undefeated. 🧮

The Right Property > The Perfect Rate
Finding a property that meets your investment criteria or lifestyle needs is way harder than finding a good rate. If the deal makes sense at 6.21%, it's probably worth doing. Waiting for 5.5% rates while watching perfect properties get snapped up is a losing strategy. Just saying. 🎯

🎯 Your 2026 Game Plan:

Ready to make moves in 2026? Here's where to start:

🌟 The Bottom Line

Rates ticked up a tiny bit today, but we're still in a range that makes deals work if you run the numbers properly. The 1% rule is your friend. The spring STR season is closer than you think. And 0% APR credit card arbitrage is a thing you should probably know about (but use responsibly). 🎯

January is when serious people make serious moves while everyone else is still in "resolution mode." Don't be the person who spends Q1 planning and Q2 wishing they'd acted in Q1. The tax advantages, cashflow opportunities, and equity building start the day you close—not the day you finally feel "ready." 💪

Remember: Perfection is the enemy of progress. Good deals at 6.21% beat perfect deals at 5.5% that never materialize. Run your numbers, do your homework, and talk to the right people. The market doesn't wait for anyone. 🚀

Stay sharp, stay curious, and let's make 2026 count. Even if rates go up another 0.02% tomorrow. 😉

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See you tomorrow (Friday) for another dose of mortgage market intel!

Disclaimer: This newsletter is for informational and entertainment purposes only. Rates and terms vary by lender and borrower qualifications. The 1% rule is a screening tool, not a guarantee of profitability. Credit card arbitrage requires discipline and carries risks. Always consult with licensed mortgage, financial, and tax professionals for your specific situation. Past performance doesn't guarantee future results.