Mortgage interest rates rising, what does it mean for you? A rise in the mortgage interest rate does affect your buying power—how much house you can buy or at what level you can keep your monthly payment. It will negatively affect you too, sellers. Read on to learn what a rate increase on home looks like.
In perspective interest rates today are still fabulous. Home mortgage rates in the middle-1980s were common in the 11 to 16% range. Freddie Mac offers this interest rate comparison for 30-year fixed rate mortgages since 1971. Rates now are up a little since 2021, but still better than they’ve been for years.
Rising in 2022
On February 2nd, 2022, the report issued by Freddie Mac indicates that the 30-year fixed rate mortgage rates rose from 3.22% to 3.55% Though we don’t know, predictions are that mortgage interest rates will continue to rise through this year.
The average sale price for a home in northern Door County is in the $300,000 range. Consider these mortgage payments:
$360,000 home price 3% interest rate $1,518 monthly mortgage principal and interest
$360,000 home price 4% interest rate $1,719 monthly mortgage principal and interest
$360,000 home price 5% interest rate $1,932 monthly mortgage principal and interest
Those are $200 dollar per month increases with just a percent increase in mortgage rates.
For a $200,000 property that increase is $92 per month.
The Moral of This Story
If the time is right for you to buy now, then NOW is the time to buy. Let’s get started by talking about your needs, wishes and requirements, getting you on an instant Market Watch for new listings, and read my article on how to compete in this very competitive real estate market. Call me at 920-493-5472, or email me at firstname.lastname@example.org. I look forward to chatting with you soon.