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If you can afford the rate, why not? You can always refinance later (if rates ever go down). Most rentals I've found have bumped up their pricing to be just shy of buying a home at current rates. How coincidental, no? I was right in the middle of financing a home with closing less than 30 days out and got cut, so needless to say that was scuttled. Fortunately, the builder gave me back my $10k deposit, though they were under no legal obligation to do so. Frankly, I was blown away. With a 3% loan on your current, I'd imagine there is going to be a lot of recommendation to rent out your current home and mortgage another. However, I'm a person of simplicity, and with current laws heavily in favor of NOT protecting landlords, I couldn't do that.
I would have ended up with around 7% if everything had gone through, and that included a small buydown. Though, I'm not too fond of the whole "buydown" concept, because it seemed to me you're just prepaying the equivalent points taken off.
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