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.

Posted on March 19, 2020 at 8:46 pm
Justine Marx | Category: Buyers, WHO LOVES STATS, Windsor Real Estate | Tagged , ,

A History Lesson

One of the most common questions we hear from clients is “Where do you think interest rates are going?”

Virtually all of the experts we follow put rates above 5% going into next year and some see rates approaching 5.5% by the middle of 2019. What’s certain is that there are economic forces at work that are pushing rates higher.

So, how about a little history lesson? How do today’s 30- year mortgage rates compare to this same date in history going all the way back to 1990?

• Today = 4.85%
• 2017 = 3.94%
• 2015 = 3.82%
• 2010 = 4.27%
• 2005 = 5.98%
• 2000 = 7.84%
• 1995 = 7.75%
• 1990 = 10.22%

While today’s rates feel high only because they are higher than 2017, they are quite a bit lower than at many times in history.

 

Posted on November 13, 2018 at 9:32 pm
Justine Marx | Category: Buyers, Economics | Tagged , , , ,