Mortgage Interest Rates – What Difference Does It Make

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
    • • •   Est Savings = $143 per month, $1,700 per year

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.