As we reported last Friday, long-term interest rates are on the rise, and may be hitting an average of 4 percent in the very near future.
While still historically low, rates have risen notably in just the last month, and so the difference in monthly mortgage payments if you bought a month ago versus today are notable. UrbanTurf wanted to take a look at just how much the rate increase impacts homeowners’ bottom lines.
Using this four-bedroom rowhouse in Mount Pleasant priced at $795,000, we took a look at the difference in monthly payments, based on varying interest rates over the last 30 days.
Let’s assume that in each case, the homeowner puts down 20 percent and takes out a loan for the remaining $636,000.
Here are the three interest rate scenarios.
May 2nd: The average mortgage rate was 3.35 percent.
Monthly Mortgage Payment: $2,802.94
Total Outlay on Mortgage (Payment x 360 months): $1,009,058.40
May 23rd: The average mortgage rate is 3.59 percent.
Monthly Mortgage Payment: $2,887.97
Total Outlay (Payment x 360 months): $1,039,669.20
June 6th: The projected average mortgage rate is 3.9 percent.
Monthly Mortgage Payment: $2,999.81
Total Outlay (Payment x 360 months): $1,079,931.60
So, the difference between a rate of 3.35 percent and 3.9 percent is about $197 a month or $70,873 over the life of the loan.
This article originally published at http://dc.urbanturf.com/articles/blog/the_difference_a_month_makes/7153
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