2020-03-03
How Interest Rates Can Impact Your Monthly Housing Payments


How Interest Rates Can Impact Your Monthly Housing Payments | MyKCM

Spring is right around the corner, so flowers are starting to bloom, and many potential homebuyers are getting ready to step into the market. If you’re thinking of buying this season, here’s how mortgage interest rates are working in your favor.

Freddie Mac explains:

If you’re in the market to buy a home, today’s average mortgage rates are something to celebrate compared to almost any year since 1971…

Mortgage rates change frequently. Over the last 45 years, they have ranged from a high of 18.63% (1981) to a low of 3.31% (2012). While it’s not likely that the average 30-year fixed mortgage rate will return to its record low, the current average rate of 3.45% is pretty close — all to your advantage.”

To put this in perspective, the following chart from the same article shows how average mortgage rates by decade have impacted the approximate monthly payment of a $200,000 home over time:How Interest Rates Can Impact Your Monthly Housing Payments | MyKCMClearly, when rates are low – like they are today – qualified buyers can benefit significantly over time.

Keep in mind, if interest rates go up, this can push many potential homebuyers out of the market. The National Association of Home Builders (NAHB) notes:

“Prospective home buyers are also adversely affected when interest rates rise. NAHB’s priced-out estimates show that, depending on the starting rate, a quarter-point increase in the rate of 3.75% on a 30-year fixed rate mortgage can price over 1.3 million U.S. households out of the market for the median-priced new home.”

Bottom Line

You certainly don’t want to be priced out of the market this year, and waiting may mean a significant change in your potential mortgage payment should rates start to rise. If your financial situation allows, now may be a great time to lock in at a low mortgage rate to benefit greatly over the lifetime of your loan.


 Subscribe to RSS Feed
Welcome to our Blog!
2020-03-20
A Recession Does Not Equal a Housing Crisis [INFOGRAPHIC]

2020-03-19
Are We About to See a New Wave of Foreclosures?

2020-03-18
Three Reasons Why This Is Not a Housing Crisis

2020-03-17
Two Big Myths in the Homebuying Process

2020-03-16
5 Simple Graphs Proving This Is NOT Like the Last Time

2020-03-13
Buying a Home: Do You Know the Lingo? [INFOGRAPHIC]

2020-03-12
Yes, You Can Still Afford a Home

2020-03-11
Confidence Is the Key to Success for Young Homebuyers

2020-03-10
Equity Gain Growing in Nearly Every State

2020-03-09
New Homes Coming to the Housing Market This Year

2020-03-09
The Difference an Hour Makes [INFOGRAPHIC]

2020-03-06
Impact of the Coronavirus on the U.S. Housing Market

2020-03-04
Real Estate Is Soaring, But Not Like 2008

2020-03-03
How Interest Rates Can Impact Your Monthly Housing Payments

2020-03-02
How Your Tax Refund Can Move You Toward Homeownership This Year

2020-02-28
10 Steps to Buying a Home [INFOGRAPHIC]

2020-02-28
How Much “Housing Wealth” Can You Build in a Decade?

2020-02-26
Thinking of Selling? Now May Be the Time.

2020-02-25
Entry-Level Homeowners Are in the Driver’s Seat

2020-02-24
Opportunity in the Luxury Market This Year

2020-02-21
Interest Rates Over Time [INFOGRAPHIC]

2020-02-20
The #1 Misconception in the Homebuying Process

2020-02-19
The Many Benefits of Aging in a Community

2020-02-18
How Trusted Professionals Make Homebuying Easier to Understand

2020-02-17
The Overlooked Financial Advantages of Homeownership

Click here to see ALL articles.




Comment on this Article

Your Name:
Your Email:
Comments:
Verify:  Please enter the numbers shown to help eliminate spam.