As interest rates fall to their lowest level since February, UrbanTurf is taking its semi-regular look to see how current rates are impacting mortgage payments compared to just four months 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:
April 2021: The average mortgage rate was 3.18 percent.
Monthly mortgage payment: $2,761
Total outlay on mortgage (monthly payment x 360 months): $993,885
August 2021: The average mortgage rate is 2.80 percent.
Monthly mortgage payment: $2,629
Total outlay on mortgage (monthly payment x 360 months): $946,701
So, the difference between a rate of 3.18 percent and 2.8 percent is $132 a month or $47,184 over the life of the loan.
This article originally published at https://dc.urbanturf.com/articles/blog/132-a-month-the-difference-four-months-makes-in-interest-rates/18561.
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