Let's assume for a moment that a first-time buyer decides to buy a $150,000 townhouse in Harrisonburg.  With the appropriate income and credit scores, they may be able to obtain a rate as low as 4.625% on a 30 year fixed rate mortgage, with no downpayment. 

In the first year, this first-time buyer would likely have the following income and expenses:

• - $3,500 on closing costs
• - $952/m on mortgage payments (principal, interest, taxes, insurance, pmi)
• + $8,000 tax credit
• + $1,400 tax savings from interest payments
  

That is a total net cost of $5,524 in the first year of homeownership.

Contrast this to a buyer who closes on December 1 of this year.  At that point, the tax benefit will have ceased, and I predict that rates will be at least as high as 5.75% on a 30 year mortgage.

• - $3500 on closing costs
• - $1,056/m on mortgage payments (principal, interest, taxes, insurance, pmi)
• + $1,725 tax savings from interest payments

This is a total net cost of $14,447 in the first year of homeownership.

The combination of the tax credit, and the extremely low interest rates we are currently experiencing are likely to save you almost $9,000 in the first year of homeownership. 

As you can see, much of the above $9,000 of savings is in the $8,000 tax credit for first time buyers --- but the additional savings because of a low interest rate becomes quite dramatic over the course of the loan.  Buying now at very low rates (4.625%) may save you as much as $37,000 over the next 30 years as compared to buying at 5.75%. 

• A $150,000 purchase financed over 30 years at 5.75% will result in $165,129 paid in interest. 
  
• If had been financed over 30 years at 4.625%, you would only paid $127,635 in interest.