Mortgage rates are just climbing out of control, and many hopeful home buyers in Frisco and McKinney withing the Collin County area wonder, “how will rates change my monthly payment months from now?”. Assuming they keep climbing, we will very likely see FHA, VA, Conventional, Jumbo, and USDA mortgage rates blow past the 5% mark and hopefully sputter just below 6% at worse.
Now you might ask, “how much will it cost me if rates increase to 6%?” Here are some estimates of how your mortgage payment might change if you were buying when rates were around the 4% mark in comparison to if they end up near or at 6%. I’ll show them at different LOAN amounts, so if you are putting money down, subtract the down payment from your hopeful purchase price to see what your loan amount is and you’ll get the right idea of the principle and interest part of your payment. If you need or choose to run some payment estimates on your own, go to my Frisco Mortgage website and scroll down and look on the right side of the page to use my mortgage calculator.
Mortgage payment comparison:
Principle and Interest payment at 4% over 30 years-
- $100,000 Loan Amount (note: not purchase amount but loan amount) = $477
- $125,000 Loan Amount = $596
- $150,000 Loan Amount = $716
- $175,000 Loan Amount = $835
- $200,000 Loan Amount = $954
- $300,000 Loan Amount = $1,432
- $350,000 Loan Amount = $1,670
Principle and Interest payment at 6% over 30 years-
- $100,000 Loan Amount (note: not purchase amount but loan amount) = $599
- $125,000 Loan Amount = $749
- $150,000 Loan Amount = $899
- $175,000 Loan Amount = $1,049
- $200,000 Loan Amount = $1,199
- $300,000 Loan Amount = $1,798
- $350,000 Loan Amount = $2,098
The difference between your monthly payments as you can see above is very surprising to some people. Coupled with the fact that, with recovery from recession comes a slow increase in the value of homes, the house you can or choose to afford today may be $10,000 – $30,000 less in purchase price in the coming 6 – 12 months.