One year ago, the average on a 30-year fixed-rate mortgage was 4.66 percent. Today, Freddie Mac reported 4.06 percent as the average on this type of loan, a 60 basis point drop over 12 months. So, UrbanTurf decided to see how that change in rates impacts mortgage payments.
To get a sense, we took a home with a $700,000 purchase price and assumed our 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:
May 2018: The average mortgage rate was 4.66 percent.
Monthly mortgage payment: $2,890
Total outlay on mortgage (monthly payment x 360 months): $1,040,732
May 2019: The average mortgage rate is 4.06 percent.
Monthly mortgage payment: $2,692
Total outlay on mortgage (monthly payment x 360 months): $969,455
So, the difference between a rate of 4.66 percent and 4.06 percent is $198 a month or $71,277 over the life of the loan.
See other articles related to: interest rates
This article originally published at https://dc.urbanturf.com/articles/blog/200-a-month-the-difference-a-year-makes-in-interest-rates/15434.
Most Popular... This Week • Last 30 Days • Ever
The preferred mortgage product among most home buyers is the fixed-rate mortgage. How... read »
The new images provide a better sense of the big residential plans in the works for t... read »
Eights month after a new proposal to redevelop part of the Takoma Metro station was p... read »
More employers are demanding that employees come back to the office; children on the ... read »
Why the Boring Company is a tease for cities; the return-to-the-office TikTok influen... read »
To help home buyers and sellers both novice and seasoned, UrbanTurf is running a seri... read »
As home buyers get the itch to look for a home and start to venture out to open house... read »
Plans for the New York-based eatery appear to be moving forward.... read »
The development for four parcels at The Yards from Brookfield Properties and the Menk... read »
The concept includes 14 lanes for bowling, a 1,200 person concert venue, a craft bar ... read »
With this weekend's DC houseboat tour a day away, UrbanTurf thought it only fitting t... read »
President Obama travels to Denver this morning to sign the stimulus bill that has bee... read »
In this week's installment of Ask An Agent, a reader wonders if there is a rule for h... read »
As The Wharf prepares to begin construction, DC's houseboat community heads to its ne... read »
In this week's installment of Ask An Agent, a reader asks a fairly common question th... read »
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!
Intro guides for first-time home buyers
Awesome and unusual real estate from across the DC Metro