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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Some of the information contained herein has been provided by SWMLS, Inc. This information is from sources deemed reliable but not guaranteed by SWMLS, Inc. The information is for consumers' personal, non-commercial use and may not be used for any purpose other than identifying properties which consumers may be interested in purchasing.
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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