You can get a bigger home for less money by taking advantage of today’s interest rates. Here’s why.
In today’s episode, I’d like to introduce Eric Putt from Waterstone Mortgage. He’s going to help break down some of the numbers regarding interest rates, buying power, and what it all means for you.
After a period of record-low interest rates, the numbers are starting to rise again. Now, the best rates are sitting around 3.5%. Using that rate, we’re going to run through an example to give you an idea of what you could afford now versus in the past.
For a $300,000 loan at a 3.5% interest rate, principal and interest payments would be about $1,350 per month on a 30-year fixed-rate mortgage. Over the last 15 years, the rate averaged around 4.5%. If we used that rate on a $300,000 loan, the monthly payment would rise to about $1,520—a $170 increase each month. Essentially, this means that if you had to decrease your payment by $170 per month, your buying power would drop to about $265,000.
“After a period of record-low interest rates, the numbers are starting to rise again.”
The takeaway is that interest rates are still incredibly low, and you can leverage this to buy a bigger home for less money. If this information has got you thinking about jumping into the market, or if you have any questions about real estate, feel free to reach out to me. I look forward to hearing from you soon.
