Call Eren Today: 1-360-219-3616

The Current Interest Rate and Its Importance

By in Real Estate Blog with 6 Comments

The Current Interest Rate and Its Importance

Find Out Your Personal Buying Power Today!

 

 It’s all about the Benjamins! Don’t forget the Hamiltons, Jacksons, and other presidents though!  Here’s why: Interest Rates MATTER!

 

 

 When you apply for a loan, one of the things you keep in mind is where interest rates are at. Sometimes it is difficult to judge the market, so you just take it as it is. When I purchased my first home in 2010, we got a historically AMAZING rate of 5.25%. Then, we watched rates plummet to 3.25%! Our payments would have been about $220/month lower, but if we waited, we would be out of a house! This is how most people think interest rates affect them, but I want to talk about how they can impact you on a much larger scale.

AFFORDABILITY

The only way to explain how interest rates can impact you in a major way is to show an example.

$200,000 loan for 30 years at 4.5% = $1014 per month *(not including PMI, Taxes, Insurance).

$200,000 loan for 30 years at 5.0% = $1074 per month*.

The interest rate increasing just half a percent increases your monthly mortgage payment by $60! Perhaps this doesn’t seem like a lot to you, but over the course of the mortgage, you will spend an extra $21,600!

Right now, the current rate is fluctuating between 4.375% and 4.50%. As the market improves, the rates will increase.

$200,000 loan for 30 years at 4.375% = $998 per month*.

 

The fluctuation between 4.375% and 4.50% is $16/month. Again, this may not seem like a lot, but over time it really adds up! Over the course of a year, this is an extra $192 absolutely WASTED on interest. That is at least 48 gallons of gas that you pumped onto the ground rather than in your car!

What is the takeaway from all of this? The current interest rate is important! Interest rates are still at historically low levels and will be for some time. However, it is wise to remember than anything below 8% is historically AMAZING. The current interest rate is important to you because every increment takes away your hard earned dollars. The market is improving, and interest rates are rising!

 

For More Information:

U.S. House Price Affordability is Very Sensitive to Interest Rates

How is the Housing Affordability Index Calculated

 

Affordability Calculator:

Mortgage Rate Calculator

 

Find Out Your Personal Buying Power Today!

Share This

6 Comments

  1. Im glad I finally signed up

    Hi there, this weekend is pleasant designed for me, because this occasion i am reading this
    enormous informative paragraph here at my home.

  2. minecraft says:

    Im happy I finally registered

    It is not my first time to visit this web site, i am visiting this website dailly and obtain nice data from here all the time.

  3. minecraft says:

    Im glad I finally signed up

    Do you mind if I quote a few of your posts
    as long as I provide credit and sources back to your website?
    My blog is in the exact same area of interest as yours and my visitors would truly benefit from some of the information you
    present here. Please let me know if this ok with you.
    Cheers!

  4. tinyurl.com says:

    Im happy I finally registered

    Thanks in favor of sharing such a good opinion, article is pleasant, thats why i have read it entirely

  5. minecraft says:

    Im glad I now registered

    Thanks for one’s marvelous posting! I actually
    enjoyed reading it, you happen to be a great author.
    I will make sure to bookmark your blog and will eventually
    come back very soon. I want to encourage you to definitely continue your great writing, have a nice morning!

  6. Im glad I finally signed up

    whoah this weblog is magnificent i really like reading your posts.
    Keep up the great work! You realize, a lot of individuals
    are hunting round for this information, you could aid them greatly.

Leave a Reply

Your email address will not be published. Required fields are marked *