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Sep 13 2016 25172 1
How much will increasing interest rate changes affect me in dollars and cents?
There is a lot of talk going around about interest rates increasing,
On CNBC 09/12/16 - Mortgage rates took their biggest leap in two months on Fridayâ€¦ It was only an eighth of a percentage point (0.125%) â€¦. First and foremost, rising rates scare a whole host of housing players: buyers, sellers, builders and homeowners. The average contract interest rate on the popular 30-year fixed mortgage is still historically very low, around 3.5 percent. The historical average for that rate is just more than 8 percent, and it has been as high as 18 percent.â€¦.
However not much is being said about how much these interest rate changes will affect a borrower in actual dollars and cents. How much will my monthly payment increase? How much less of a mortgage loan can I qualify for as rates increase?
Following are basic estimated figures you can use to get an idea of how much a 0.5% (50 basis point) increase in interest rates will affect monthly mortgage payments and a loan amount you can qualify for fixed rate financing, estimates based solely on interest rate change and assuming all other aspects of mortgage underwriting, your personal financial status and your credit do not change as rates increase:
Mortgage Interest Rate Monthly Mtg Reduction of Loan
Amount Increase Pmt Increase Amount Approval
$100,000 0.50% $ 30 $ 6,000
$200,000 $ 58 $12,000
$300,000 $ 88 $18,000
$400,000 $118 $23,000
The sky is not falling but a dollar saved is a dollar we all can certainly use for something else. Times are a changing especially in this wild election year. Grab it while you can, there is nothing on horizon but increased costs. Again these are estimated figures, see your mortgage lender for more information. If you need a mortgage lender referral please feel free to contact me I can provide dependable referrals.
Broker Associate / MBA
Guiding others to make the best possible
decisions for their personal needs.
Don Rochelleâ€™s extensive real estate experience started upon getting a Masters in Business Administration with an emphasis in real estate in the 80â€™s and working in commercial real estate in Texas....
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