One of the few bright spots in the economic news is that home mortgage interest rates continue to be low. In fact, rates are at a 5 year low for 15 and 30 year fixed rate loans. Here’s how this can effect your payments on a 30 year fixed rate $400,000 loan:
| 30 Year Rates |
Monthly Payment |
| Current rate 4.33 | 1986.54 |
| 4.75 | 2086.59 |
| 5.25 | 2208.82 |
The savings are significant — a half a percent saves about $100 per month on a $400,000 loan. The savings on a 15 year fixed rate loan are also substantial:
| 15 Year Rates |
Monthly Payment |
| 3.42 | 2844.63 |
| 3.75 | 2908.89 |
| 4.25 | 3009.00 |
The rate for ARMS is also very low — as low as 3.1 percent. At 3.1 percent the payment for a $400,000 loan would be 1708.07. This is also a big savings over the 30 year fixed rate — about $275 per month.
Another way to think about this is that you can afford more house for the same payment. Let’s assume you want your payment to be $2000 per month. At the current rate of 4.33 you can borrow $402,710. If the rates go up to 4.75 percent, you can afford $383,400 — a difference of almost 20,000. The more the rates go up, the less house you can finance for the same monthly payment.
If you think it might be the time to make a real estate move, give us a call at 303-402-6000 or visit our website: www.bernardirealestate.com
