What can you do now to take advantage of the current rate position that will also bolster your long-term wealth plans?

Americans can look to Arizona as a place of economic opportunity at a time when many are hoping to put the uncertainty of 2020 behind them. In fact, Arizona is one of the most attractive states for relocation, with Phoenix coming in as the top metro for inflow of new residents, gaining approximately 80,000 new residents in 2020 according to Redfin.

With one of the top housing markets in the country and a host to some of the sectors most resilient amid last year’s downturn – a growing healthcare space, a thriving technology hub and real estate market – new job creation seems to parallel the boost in our population. This all speaks to the massive growth and strong recovery that our local economy is poised to achieve. Coupled with the astounding low interest rate environment, Arizonans can use the current market conditions to their advantage – there are tremendous opportunities that can serve the long-term financial plans of many, and will also serve the local economic recovery overall.

Noreen Bishop Hill is a Managing Director and the Arizona Market Manager at J.P. Morgan Private Bank.


With rates so low, it may make sense to refinance a mortgage (floating or fixed), even if it was taken out in the last few years.

Through tax-aware borrowing, consider maximizing the tax efficiency of past or future home purchase(s) with a tax-aware borrowing strategy – you could pay for a property in cash and then undertake a cash-out refinance with the proceeds used for taxable investments. In this way, interest on the loan is classified as investment interest, which is uncapped and can be deducted fully against your investment income. By contrast, the standard mortgage interest deduction is limited to interest on no more than $750,000 of acquisition debt.

Business owners

Arizonans are entrepreneurial – if you’re a business owner, a low rate environment is a good time to expand facilities or invest in new capital equipment. A portfolio line of credit could offer low rate financing that typically has no setup costs. To boot, a provision in the 2017 Tax Cuts and Jobs Act allows business owners to expense 100% of the cost of many of these assets. However, the provision begins to phase out in 2023.


Low interest rates are putting certain portfolios under pressure, and additional drivers of return and defensiveness may be needed to meet your goals. A portfolio line of credit can finance time-sensitive, high-conviction investment ideas. In this way, you can avoid holding excess cash earning a negative real rate of return.

You may consider putting extra cash to work. Holding cash in excess of what’s needed for regular spending, rainy day funds and near-term plans means you’re losing purchasing power over time, you might think through reevaluating how much cash you need to hold.

Adding alternatives can help strengthen your portfolio by providing new sources of diversification and return. If you have a multi-year time horizon, now may be a good time to explore alternative investments in real assets—such as real estate and infrastructure, as well as private and direct lending strategies. Real assets can provide low or negative correlation to stocks, higher yields than government bonds, protection against inflation and a steady stream of income. Environmental, Social and Governance (ESG) investing might also come in to play with this approach – areas like clean energy, social impact and overall sustainability are gaining momentum, and investing sustainable does not require a performance tradeoff.

In the banking community we are, overall, optimistic about 2021. Considering all facets of current economic conditions, vaccine innovation and policy support, it is more important than ever to focus on long-term financial planning. Information is abundant, but a professional view can help cut through the noise and make all the difference to your investments and your wealth.


Noreen Bishop Hill is a Managing Director and the Arizona Market Manager at J.P. Morgan Private Bank. Based in Scottsdale, AZ, Noreen oversees a team of bankers, investors, wealth strategists and financial specialists that deliver guidance across investing, philanthropy, family office management, credit, fiduciary services, advisory services and more.