From a $350,000 Condo to a $1 Million House, The Difference a Year Makes in Interest Rates
✉️ Want to forward this article? Click here.
One year ago, the average rate for a 30-year fixed-rate mortgage was 3.94 percent. This week, Freddie Mac reported 4.83 percent as the average on this type of loan, an 89 basis point jump over 12 months. This change will effect how much new homebuyers pay on their monthly mortgage, so UrbanTurf took a closer look at how the rise in mortgage rates will impact buyers at three price points.
First, we took a look at how a homebuyer with excellent credit would fare purchasing a $350,000 home. Using the current rates and rates from last year, we examined how monthly mortgage payments have changed. For the price point, we looked at buyers who made a 20 percent down payment, and also buyers who made a 3.5 percent down payment.
story continues below
loading...story continues above
November 2017: The average mortgage rate was 3.94 percent.
Monthly mortgage payment (20 percent down): $1,327
Total outlay on mortgage (monthly payment x 360 months): $477,756
Monthly mortgage payment (3.5 percent down): $1,601
Total outlay on mortgage (monthly payment x 360 months): $576,292
November 2018: The average mortgage rate is 4.83 percent.
Monthly mortgage payment (20 percent down): $1,474
Total outlay on mortgage (monthly payment x 360 months): $530,690
Monthly mortgage payment (3.5 percent down): $1,778
Total outlay on mortgage (monthly payment x 360 months): $640,148
For buyers making a 20 percent down payment on a $350,000 unit, the difference between a rate of 3.94 percent and 4.83 percent is $147 per month, or $52,934 over the life of the loan.
On the other hand, for buyers making a 3.5 percent down payment, the difference between a rate of 3.94 percent and 4.83 percent is $177 per month, or $63,856 over the life of the loan.
Next, we took a look at how homebuyers with excellent credit would fare purchasing a $700,000 home, comparing payments based on last year's rates and this week's rates.
November 2017: The average mortgage rate was 3.94 percent.
Monthly mortgage payment (20 percent down): $2,654
Total outlay on mortgage (monthly payment x 360 months): $955,508
Monthly mortgage payment (3.5 percent down): $3,202
Total outlay on mortgage (monthly payment x 360 months): $1,152,583
November 2018: The average mortgage rate is 4.83 percent.
Monthly mortgage payment (20 percent down): $2,948
Total outlay on mortgage (monthly payment x 360 months): $1,061,384
Monthly mortgage payment (3.5 percent down): $3,556
Total outlay on mortgage (monthly payment x 360 months): $1,280,293
For buyers making a 20 percent down payment, the difference between a rate of 3.94 percent and 4.83 percent is $294 per month, or $105,876 over the life of the loan.
On the other hand, for buyers making a 3.5 percent down payment, the difference between a rate of 3.94 percent and 4.83 percent is $354 per month, or $127,710 over the life of the loan.
Last, we took a look at how homebuyers with excellent credit would fare purchasing a $1 million home.
November 2017: The average mortgage rate was 3.94 percent.
Monthly mortgage payment (20 percent down): $3,792
Total outlay on mortgage (monthly payment x 360 months): $1,365,012
Monthly mortgage payment (3.5 percent down): $4,574
Total outlay on mortgage (monthly payment x 360 months): $1,646,546
November 2018: The average mortgage rate is 4.83 percent.
Monthly mortgage payment (20 percent down): $4,212
Total outlay on mortgage (monthly payment x 360 months): $1,516,262
Monthly mortgage payment (3.5 percent down): $5,081
Total outlay on mortgage (monthly payment x 360 months): $1,828,991
For buyers making a 20 percent down payment, the difference between a rate of 3.94 percent and 4.83 percent is $420 per month, or $151,250 over the life of the loan.
On the other hand, for buyers making a 3.5 percent down payment, the difference between a rate of 3.94 percent and 4.83 percent is $507 per month, or $182,445 over the life of the loan.
See other articles related to: down payment, interest rates, mortgage rates, mortgages
This article originally published at https://dc.urbanturf.com/articles/blog/the-difference-a-year-makes-in-interest-rates-at-three-price-points/14650.
Most Popular... This Week • Last 30 Days • Ever
The university and developer Greystar have filed plans with DC for the new Fusion Bui... read »
As the redevelopment of the Mazza Gallerie mall in Friendship Heights heads towards c... read »
One of the critical factors in determining whether refinancing is a wise decision is ... read »
The one-of-a-kind residence was built out of two expansive classrooms, an office, two... read »
Sentinel Real Estate filed a revised conceptual site plan application this week to re... read »
- A First Look At The Big Plans For Howard's Wonder Plaza
- Total Wine Coming To Friendship Heights
- What Is The Best Spread To Refinance Your Mortgage?
- 13 Foot Ceilings, 5,800 Square Feet in a Historic Schoolhouse: A Rare DC Loft Hits the Market
- 256-Unit Project Proposed to Replace Rosslyn Buildings Moves Forward
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. Start browsing below!
First-Timer Primers
Intro guides for first-time home buyers
Unique Spaces
Awesome and unusual real estate from across the DC Metro