Monday Market Update: Feb 13, 2017
Posted by: kateg 11 months, 1 week ago
Ever wonder what the effect raising interest rates has on you as a Buyer? As rates continue to inch up, we thought it would be helpful to put the rate changes into real dollars and cents.
To do that, we took a $2,500/mo mortgage payment and broke down the affordability at different interest rates. Keep in mind, that this $2,500/mo figure doesn’t factor in any property taxes nor insurance, but instead is simply a calculation of how much you can afford, at a given interest rate, for $2,500/month.
The results might shock you. Check out the graph below.
At a 4% interest rate, a $2,500/month mortgage equates to a roughly $523,000 mortgage principle.
At a 5% interest rate, a $2,500/month mortgage equates to roughly $465,000 mortgage principle.
In other words, in order to keep your monthly mortgage payment at $2,500, if interest rates were to climb from 4% to 5%, your affordability would go down by $58,000!
Don’t panic, though! Interest rates aren’t expected to rise quickly, so you have plenty of time to lock in a reasonable interest rate to afford the perfect house. If you need suggestions on mortgage brokers, give us a call! We have a team of incredible mortgage brokers who can help you make your dream a reality!Share on Twitter Share on Facebook
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