As mentioned previously in my blog; later this spring the top economists are predicting that interest rates will rise. What that means to you when you break it down in terms of your monthly payment is the following, (here is an example):
Purchase of $200,000 with 3.5% down payment at current rate of 5.200% for a 30 year fixed rate loan = $1,078.33
Same scenario as above with an increase to the rate of 1% for a total rate of 6.200% = $1,202.75
Total increase in monthly payment of $124.42.
To purchase at the same monthly payment as what you could with today’s rates in an economy with higher rates you would be buying a home for around $179,000. That is a decrease in purchasing power of $21,000 or over 10% less of a home!
If you are curious about viewing a property on the MLS now, or you have another real estate need, please contact me at mbedard@hickokandboardman.com and I will be happy to help you!
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