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.
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