By The Dream Digs Team, 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.
THE DREAM DIGS TEAM
Aryne + Dulcinea, Earth Advantage Principal Broker | Earth Advantage Broker | ADU Specialists | OR
The Dream Digs Team are full-service, high-producing agents, who know how to navigate the unique challenges facing the Portland real estate market. The secret to their success lies in their professionalism and complementary skill sets. In 2012, Aryne + Dulcinea seized the opportunity to combine their creative and technical acumen to create a values-driven, client-driven team unlike any other. We are expert negotiators and project managers with a strong background in creative marketing. The Dream Digs Team are fierce advocates for our clients.
Our passion for real estate is connected to our commitment to the Portland way of life - a dedication to sustainability and appreciation for all things local. As Earth Advantage Brokers and ADU Certified Specialists, our team is 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, The Dream Digs Team will work in collaboration to guide you in investing in your future and reaching your real estate goals.
Dedicated to serving buyers and sellers with expertise, enthusiasm, and attention to detail, Aryne adeptly navigates the Portland real estate market. Licensed since 2005, she honors our clients' wants and needs using her sharp negotiating skills and professional know-how to achieve the best results for everyone she serves. Aryne loves the Pacific Northwest! Outside of work, she enjoys hanging out with her husband, listening to music, going on road trips, and talking about everything under the sun. She looks forward to visiting her grown-up kids at college and watching them succeed in all their endeavors. She loves yoga, hiking, dinner parties, podcasts, and embracing all that Portland offers.
Dulcinea thrives on working with clients with a range of real estate goals. Born and raised in Oregon, Dulcinea comes to real estate with a background in design and education. She is an award-winning professional and a steadfast advocate when working for our clients. She has a keen eye for preparing properties for listing and finding properties that best serve our buyers' objectives. Licensed since 2013, Dulcinea works in and around Portland. She is the mother of two and wife to her high school sweetie. In her free time, she stays busy with her family, traveling, creating community, cooking, gardening, making art, exploring, and dreaming big!
Click here to get to know Aryne + Dulcinea!- T: 503-380-5124
- aryne@livingroomre.com
