Interest Rates on the Rise?
Troy Champ, Jencor Mortgage, troy@jencormortgage.com
Fixed mortgage rates are on the rise! We have moved from a low 2.74% to 3.29%, an increase of 0.25% in just two weeks.
So what does this mean for homebuyers? For every 0.25% increase to mortgage rates, purchasers qualify for approximately $10,000 less on their purchasing price (assuming a purchase price of approximately $300,000.)
What this also means is that for a 0.25% increase on a $300,000 purchase price, the homebuyer will pay $736 more in interest each year for the same mortgage. That's a $3,679 difference over 5 year term.
That's nearly $3,700 that could be going back to pay off your mortgage! Our advice, get pre-approved at a lower interest rate now so you can shrink your mortgage balance as much and as quickly as possible. That's how you prepare for the adversity of higher interest rates.