The Impact Of Higher Mortgage Interest Rates

One year ago, the average 30-year fixed mortgage interest rate was 3.94%.

Today, that same average rate is 4.81%.

Does this rise in mortgage interest rates impact buyers?  It sure does!

A buyer purchasing a $200K home would pay $82/month more for their mortgage payment -- with the increased interest rate causing it to increase from $942/month to $1,024/month.

A buyer purchasing a $300K home would pay $123/month more for their mortgage payment -- with the increased interest rate causing it to increase from $1,413/month to $1,536/month.

A buyer purchasing a $400K home would pay $164/month more for their mortgage payment -- with the increased interest rate causing it to increase from $1,884/month to $2,048/month.

Of note -- the estimated mortgage payments above include principal, interest, taxes and insurance -- and assume that the buyer is financing 80% of the purchase price.

So.....

• If you're about to buy a home, you'll be paying more per month than if you had purchased a year ago.  Hindsight is 20/20.
   
• You will still be locking in a pretty low (sub 5%) mortgage interest rate.
   
• It seems that mortgage interest rates will likely continue to (hopefully slowly) rise over the next year, so buying sooner rather than later may serve you well.

As always -- for actual payment scenarios, you'll need to consult a mortgage lender.  Shoot me an email (scott@HarrisonburgHousingToday.com) and I can make some recommendations.