Heck, I cashed in on the low interest rates myself. Last fall, we refinanced the mortgage on our Spring Texas home and snagged a 3.5% interest rate for a term of 30 years. Cha ching!
Over the last 90 days, economic good news has caused the mortgage interest rate to increase a full percentage point. As investors shifted their portfolios from bonds to the stock market, mortgage interest rates have risen to the mid 4% range for a 30 year loan.
How much does the interest rate impact your monthly mortgage payment?
Using the following assumptions of a loan amount of $175,000 and a loan term of 30 years, here’s what your monthly payment for principal and interest would be based upon a 3.5%, 4.5%, and 5.5% interest rate:
3.5% interest rate – monthly principal and interest = $785.83
4.5% interest rate – monthly principal and interest = $886.70
5.5% interest rate – monthly prinicipal and interest = $993.63
Put another way, A loan amount of $197,000 at 3.5% is about the same monthly payment for principal and interest as a loan amount of $175,000 at 4.5%. The one percentage point increase in the 30 year interest rate cost you $22,000 in purchasing power.
Mortgage interest rates in the mid 4s are still good just not as good as the 3s. If you would like to purchase a Spring Texas home before interest rates increase to 5%, give us a call at 281.804.8626
Jill Wente is an incredible realtor! We lived in the area for about 3 years before taking the house-hunting plunge... read moreJill Wente is an incredible realtor! We lived in the area for about 3 years before taking the house-hunting plunge and truly could not have chosen a better realtor to work with. Jill is professional and patient, she is an incredible resource who is 100% there for her clients at all times. We had a lot of questions and didn't want to pay any closing costs or prepaid costs out of pocket - Jill is a Master Certified Negotiation Expert and it SHOWS. We got exactly what we wanted at the price we wanted AND had several bonuses thrown in, including appliances and gutters. She was there for inspections/walk-throughs and kept in contact with our builder's salesperson as well. If you want a strong realtor who is also pleasant to work with (which I've learned is rare), then Jill is the realtor for you!! read less