Interest rates are up nearly a point from where they were a year ago and they continue to rise. The change, while incremental, is impacting monthly mortgage payments. Today’s interest rates on average are about 4.5% compared to 3.5% last year.
Using a purchase price of $350,000, with a 20% down payment, here’s the difference in monthly mortgage payments based on the today’s interest rates as compared to last year’s.
Last year the average mortgage rate was 3.50%.
Monthly Mortgage Payment: $1414
Total Outlay on Mortgage (Payment x 360 months): $509,040
The current average interest rate is 4.5%.
Monthly Mortgage Payment: $1596
Total Outlay on Mortgage (Payment x 360 months): $574,560
The difference between a rate of 3.50 percent and 4.50 percent is $182 a month or $65,520 over the life of the loan. A buyer is paying more this year for the same house that could’ve been purchased last year at a lower interest rate.
If you’ve been thinking of buying a home, don’t wait. Interest rates may continue to rise. Home prices continue to rise too. It’s time to jump in and get the home you’ve always wanted at an affordable price. If you’d like to have numbers run for your specific price range give George Mason Mortgage loan officer Brian Murphy a call at 301-571-2755. Or call me at 703-963-0142. I look forward to helping you with your home search.