Long-term mortgage rates have essentially been doing one thing in 2018: going up. Still, if you look back a year, things haven't changed all that much.
One year ago, the average on a 30-year fixed-rate mortgage was 4.19 percent. Last week, Freddie Mac reported 4.22 percent as the average on this type of loan. So, how does that change in rates impact your mortgage payments?
Well, the short answer is not a whole lot, but to get a sense, UrbanTurf took a home with a $600,000 purchase price and assumed a 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 2017: The average mortgage rate was 4.19 percent.
Monthly mortgage payment: $2,344
Total outlay on mortgage (monthly payment x 360 months): $844,013
March 2017: The average mortgage rate is 4.22 percent.
Monthly mortgage payment: $2,353
Total outlay on mortgage (monthly payment x 360 months): $847,040
So, the difference between a rate of 4.19 percent and 4.22 percent at this price point is just about $9 a month, so don't fret about rising rates just yet.
This article originally published at https://dc.urbanturf.com/articles/blog/the-difference-a-year-makes-in-interest-rates/13541.
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