Home | Newsletter | Advertise
loading...

$116 a Month: The Difference a Year Makes in Interest Rates

  • March 29th 2021

by UrbanTurf Staff

As interest rates rise above 3 percent, UrbanTurf is taking its semi-regular look to see how current rates are impacting mortgage payments compared to a year ago. 

We took a home with an $800,000 purchase price and assumed the buyer has excellent credit. Using the current rates and rates from last year, we examined how monthly mortgage payments changed. In each case, we assumed the buyer put down a 20 percent down payment. Note that these include principal and interest, but not the cost of insurance or taxes.

Here are the two scenarios:

February 2020: The average mortgage rate was 3.50 percent.

Monthly mortgage payment: $2,873
Total outlay on mortgage (monthly payment x 360 months): $1,034,597

February 2021: The average mortgage rate is 3.17 percent.

Monthly mortgage payment: $2,757
Total outlay on mortgage (monthly payment x 360 months): $992,626

So, the difference between a rate of 3.50 percent and 3.17 percent is $116 a month or $41,971 over the life of the loan.

This article originally published at https://dc.urbanturf.com/articles/blog/116-a-month-the-difference-a-year-makes-in-interest-rates/18062.

DC Real Estate Guides

Short guides to navigating the DC-area real estate market

We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!

First-Timer Primers

Intro guides for first-time home buyers

Red Flags Revealed During a Home Inspection Top 5 Tax Breaks For Homeowners Tax Relief for DC Homeowners
Condo Fee Tutorial What is a Rent Back? 10 Ways To Tell If a Home Renovation is Well Done
Obtaining a Basic Business License For Your Rental What is an Adjustable Rate Mortgage? The Splitting the Rent Formula
How Much Cash Do You Need to Buy a House? Is This Condo Building Financially Healthy? Interest Rates and Mortgage Points
The Scoop on Mortgage Insurance

Unique Spaces

Awesome and unusual real estate from across the DC Metro

The Most Intriguing Loft in DC The R Street Firehouse DC’s One-Room House
Dupont Circle’s Old Frat House To Become Alley Home Best Transition From a Garage To a Home The Roundhouse
Tilden Gardens Restaurant-Turned-Home Hits Market Next Week Logan Circle’s Most Intriguing Garage Frank Lloyd Wright Goes Green in Kensington
Sears Bungalow Gets a Modern Makeover Old Town General Store Becomes Three-Level Home Making the Most of a Skinny House
A Studio 27 Renovation on Capitol Hill Once a Carriage House, Now a Home The Bank that Became a Home
From Pie to Hooch to Heroin to Home The Live-Aboards of Gangplank Marina A Treehouse with Rock Creek Park As A Backyard
Modern Tranquility in Sperryville Saddle Up For Stable Living Throwing a Curve at 550 Square Feet
A Modern Hilltop Retreat Tilden Street Restaurant Becomes Spacious Home Focus on Design: A Vastu Unit at 22 West
The DC Area’s First Net Zero Home A Yankee Goes Green DC’s First Carbon Neutral Home
Eco-Friendly Alley House Off H Street The Gym, The Stables and The Firehouse