A 1% decrease in Mortgage Interest Rates can provide significant savings to your monthly and annual mortgage payments.
Let’s use an example:
Purchase Price: $300,000
Loan Terms:
- 30 Year Conventional
- 20% Down
- Fixed Rate:
- 5% – Monthly Principal & Interest = $1,288
- 4% – Monthly Principal & Interest = $1,145
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- Est Savings = $143 per month, $1,700 per year
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Just a 1% increase added about $143 to this buyers monthly P&I and a little over $1,700 to the annual P&I. So there is a difference; a big difference. This example is calculated with a 20% down payment. If we adjust that to a lower down payment, say 5%, there is larger savings to be had per month as the buyer is leveraging more on the loan.
Purchase Price: $300,000
Loan Terms:
- 30 Year Conventional
- 5% Down
- Fixed Rate:
- 5% – Monthly Principal & Interest = $1,530
- 4% – Monthly Principal & Interest = $1,360
Est Savings = $170 per month , $2,040 per year
Engage or re-engage with a lender to understand how these low interest rates can make home ownership more achievable.