I’ve got a Christmas present for you today, about 6 months early. Hopefully you can use this gift today and not have to wait until Christmas to open it. Today I am here to talk about interest rates and what’s going on with them.
The present I am going to give you is the fact that today you can still get an extremely low mortgage rate, which greatly affects your monthly cost. As we look toward the end of the year and towards Christmas, all economic indications point to rates going up. How high are they going to rise? We can never be certain, but we do know they have been rising at a considerably faster pace as of late.
In April, if you took out a $100,000 loan for a 30-year fixed mortgage, your interest rate would have been around 3.74%, making your monthly payment $462.
Today, with that same loan over that same period of time, your rate would be at 4.27%, increasing your monthly payment to $493 a month.
If rates continue to increase at their present rate, we will hit 5% by the end of the year. When this happens, that same loan I mentioned above would actually cost you $536 a month!
In addition to the rates affecting your monthly payment, they are also going to greatly affect your buying power. If you look from April to where we are projected to be by the end of the year, buying power has decreased by over $75,000! This is a huge difference in our market, and can make or break you getting a home on the waterfront or with that extra bedroom you need.
What we are telling you today is that now represents the perfect time for you to take advantage of these stellar rates before they rise further. Historically, these rates are still very low, but the more money you can save over the life of your loan, the better.
If you have any questions about interest rates or anything else real estate related, give me a call or send me an email. I can’t wait to hear from you!