One year ago, the average on a 30-year fixed-rate mortgage was 3.34 percent. On Thursday morning, Freddie Mac reported 4.46 with an average 0.5 point as the average on this type of loan. So, how would the difference impact your mortgage payments?
Using a $500,000 home, we took a look at the difference in monthly payments, based on the today’s interest rates as compared to last year’s.
Let’s assume that in each case, the homeowner puts down 20 percent and takes out a loan for the remaining $400,000.
Here are the two interest rate scenarios.
December 2012: The average mortgage rate was 3.34 percent.
Monthly Mortgage Payment: $1,760
Total Outlay on Mortgage (Payment x 360 months): $633,600
August 2013: The average mortgage rate is 4.46 percent.
Monthly Mortgage Payment: $2,017
Total Outlay (Payment x 360 months): $726,120
So, the difference between a rate of 3.34 percent and 4.46 percent is about $257 a month or $92,520 over the life of the loan.
Here’s a look at the path of rates since January 2010:
See other articles related to: mortgage rates
This article originally published at http://dc.urbanturf.com/articles/blog/257_a_month_the_difference_a_year_makes_in_interest_rates/7895
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