By Aryne + Dulcinea, October 23, 2020
Hi Folks,
Ready to buy and want to know if now is a good time? Yes! If you look at how mortgage rates can effect your monthly bottom line, these new low rates can make a big impact on your bottom line. Below is a great explanation from MONEY UNDER 30.
How a 1 percent difference in mortgage rate affects how much you pay
Do you know what is a cash out refinance? A cash-out refinance will replace what you owe on your current home loan with a new mortgage for a higher amount.
In our example, let’s say you’re looking to take out a home loan for $200,000. If you get a 30-year mortgage and you put down a 20 percent down payment of $40,000, you’ll have a $160,000 mortgage. If you only put down 10 percent, you’ll have a $180,000 mortgage. The following table shows you how much you’ll pay—both per month and over the life of the loan—in each scenario.
| Mortgage Rate | Payment, 20% Down | 30-Yr. Interest, 20% Down | Payment, 10% Down | 30-Yr. Interest, 10% Down |
|---|---|---|---|---|
| 3.5% | $718 | $98,650 | $808* | $110,981 |
| 3.75% | $741 | $106,755 | $834* | %120,099 |
| 4% | $764 | $114,991 | $859* | $129,365 |
| 4.25% | $787 | $123,357 | $885* | $138,777 |
| 4.5% | $811 | $131,851 | $912* | $148,332 |
*Payment amounts shown do not include private mortgage insurance (PMI), which may be required on loans with down payments of less than 20 percent. Actual monthly payment may be higher.
This calculation does also not include property taxes, which could raise the cost substantially if you live in a high-tax area, or homeowner’s association (HOA) fees if you live in a condo or housing association with shared expenses.
In this example, 1 percent difference in mortgage rate results in a monthly payment that’s close to $100 higher. But the real difference is how much more you’ll pay in interest over 30 years…more than $33,000! And just think, if we lived in the 1980s when the highest mortgage rate was 18 percent, you’d be paying thousands a month just in interest!
Calculate your own mortgage rate using our simple mortgage rate calculator.
Summary
In short, mortgage rates matter. While a difference of 1 percent may not seem substantial, even when you’re comparing monthly mortgage payments on a modest loan amount, the additional amount you could end up paying in interest is staggering. And, of course, the larger your loan amount, the greater these differences will be. Being able to qualify for a low mortgage rate will keep your payment lower, yes, but it’ll also allow you to save tens of thousands of dollars over your lifetime.
-Sourced by MONEY UNDER 30.
About Us:
Over the course of their professional partnership, Aryne + Dulcinea have helped over 200 clients prosper in their new lives. During this time, they have prided themselves in their top-notch selling abilities, with homes outperforming market standards, consistently exceeding list price while most of their listings sell in under 7 days. Whether you’re looking to buy or sell, Aryne & Dulcinea will work in collaboration to guide you in investing in your future and reaching your real estate goals.
Aryne + Dulcinea
Earth Advantage Principal Broker | Earth Advantage Broker | ADU Specialists | OR
She/Her
Aryne + Dulcinea are full-service, high-producing agents, who understand how to navigate the unique challenges facing the Portland real estate market. The secret to their success is in their professionalism and complementary skill sets. In 2012, Aryne + Dulcinea saw an opportunity to combine their creative and technical wisdom to create a values-driven, full-service agency unlike any other. Expert negotiators and project management mavens with a strong background in creative marketing, Aryne + Dulcinea serve as fierce advocates for their clients. Their passion for real estate relates closely to their commitment to the Portland way of life, which entails a dedication to sustainability and appreciation for all things local. As Earth Advantage Brokers and ADU Certified Specialists, Aryne + Dulcinea are savvy in all aspects of alternative living practices—from versatile housing additions, green building practices, and revenue-generating strategies. Whether you’re looking to buy or sell, Aryne & Dulcinea will work in collaboration to guide you in investing in your future and reaching you real estate goals.
Aryne greets working with clients throughout Portland with open arms. Licensed since 2005, she appreciates the ever shifting desires her clients have as they move through their real estate goals. Investigative genius on her side, Aryne will strive to bring you the results you desire. When not working for you, Aryne is a constant cheerleader for her son and daughter’s pursuits on the basketball court and on the ballet stage! She practices yoga, hikes, loves to walk and explore Portland neighborhoods, reads, and delights in soaking up everything Portland has to offer!
Dulcinea thrives on working with clients with a range of real estate goals. Oregon born, with a design and an award-winning professional background, Dulcinea is steadfast when it comes to working for her clients and has a keen eye for properties that best serve client objectives. Licensed since 2013, Dulcinea works in and around Portland. A mother of two and wife to her high school sweetie—in her free time she stays busy with her family, travel, community activism, exploring the outdoors, curating art shows, and dreaming big!
Click here to get to know Aryne + Dulcinea!- T: 503-380-5124
- F: 503-961-8224
- aryne@livingroomre.com
