How do higher mortgage interest rates affect monthly payments?


How do higher mortgage interest rates affect monthly payments?
By Scott Rogers • December 23, 2016
Just after the election, mortgage interest rates started rising. They started around 3.5%, and have since climbed to somewhere between 4.25% and 4.3%. It seems unlikely that they will come back own anytime soon -- if ever. So, what do these new mortgage interest rates mean for home buyers? Well, higher mortgage payments, naturally. The graph above shows the potential change in a monthly mortgage payment for a median priced home ($190K) as well as a home priced at $250K and $350K. The payment scenarios above assume that you are financing 80% of the purchase price -- and yes, I know, plenty of folks are really financing 90% or 95% of the purchase price. If you are financing a greater portion of the purchase price, the monthly payment will be higher, and the increase in the monthly payment will be greater. As you can see above..... The buyer of a $190K home would be paying $65 more per month. The buyer of a $250K home would be paying $86 more per month. The buyer of a $350K home would be paying $119 more per month. So..... If you're about to buy a home, you'll be paying more per month than if you had purchased before the election. Hindsight is 20/20. You will still be locking in a ridiculously low (4.25% more or less) mortgage interest rate. It seems that mortgage interest rates will likely continue to (hopefully slowly) rise over the next year, so buying sooner rather than later may serve you well. As always -- for actual payment scenarios, you'll need to consult a mortgage lender. Shoot me an email (scott@HarrisonburgHousingToday.com) and I can make some recommendations. Receive Updates by Email Recent Articles: Is There A Price You WOULD Pay For This House? There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 23, 2024 (unless otherwise noted).
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