Mortgage Lending Rates are at their highest since the government shutdown.
Currently set at 4.25% for a 30-year fixed mortgage, rates are significantly up considering that in early June of this year, the rate was just 3.98% (1).
Monthly Mortgage Payments
Consider this scenario: Someone is interested in purchasing a new home priced at $200,000. He has good credit and is planning on putting $50,000 down on the home.
If he had purchased the home in early June, when the lending rate was 3.98%, the monthly mortgage payment would have been $922.73 per month for a 30-year fixed mortgage on $150,000. Over the life of the loan, he will have spent $107,182.01 in interest and the total amount he will have spent for the home would have been $332,182.01.
By comparison, the same property purchased at today’s rate of 4.25% would have a monthly mortgage payment of $946.24. The amount of interest paid over the life of the loan would be $115,647.54 and the total amount paid for the home would be $340,347.54. The lending rate increase of just 0.27%, between early June and now, results in you having to pay $8,165.53 more for the same piece of property.
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Source:
1. http://www.hsh.com/2month4cast.html
Source: PR.com. The original press release can be found here.