What Happens When Interest Rates Go UP!

Posted by NMWelcomeHome Team Associates (505) 886-1432 on Wednesday, August 15th, 2018 at 10:06am

If interest rates go up it could have a significant impact on your purchasing power and payment. Let's look at an example below.

$200,000 Loan amount - 30 year fixed mortgage:

Interest Rate Monthly Payment Increase in Payment From One Rate to The Next Increase From Current Rates
3.5% $895    per month 0 0
*4.5% $1,013 per month $118 (Roughly current rates 2018) 0
5.5% $1.135 per month $122 $122
6.5% $1,264 per month $129 $251
7.5% $1,398 per month $134 $385
8.5% $1,537 per month $139 $524

...OR...

Look at it this way.

Here is how much home loan you get for the same payment: 

Loan Amount Interest Rate Monthly Payment Purchasing Power Lost To Maintain The Same Payment
$200,000 3.5% $895 per month Zero
$178,000 4.5% $897 per month $22,000
$159,000 5.5% $897 per month $41,000
$142,000 6.5% $897 per month $58,000
$128,000 7.5% $895 per month $72,000
$117,000 8.5% $899 per month $83,000

We never thought it would go up but it has over the past year and a half and is expected to be raised twice more this year and 3 times early next year. Give us a call to get started on the loan process and we will refer you to the best mortgage loan officer in the business! We service the Albuquerque and Rio Rancho area.

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1 Response to What Happens When Interest Rates Go UP!

Are You Waiting For Prices to Drop? wrote:

[...]Carlos Martinez


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Posted on Friday, August 24th, 2018 at 10:43am

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Listing information last updated on April 21st, 2019 at 8:13am MDT.