I was planning to buy a house next year with around 5% - 10% down, but I decided to step back a little, and instead of buying a house next year, I plan to wait paying all my outstanding debts (around $80k) and save for the 20% down payment (around $40k). This can take up to 5 years from now based on the current income that I am receiving. In this way, the only debt that I end up with is a car loan before buying the house. I think this is the perfect scenario.
What it worries me is that I am hearing around that mortgage rates will go up again soon, so I can lose the opportunity of getting a low-rate mortgage.
My question is: should I go back to my original plan and buy a house next year in order to avoid missing the low-rate mortgage, or should I stick with my new plan, and be almost debt-free, but with a probably higher mortgage rate?
Please note that I already have a small emergency fund in case something breaks on my apartment, and a bigger emergency fund in case of a bigger emergency.