How Mortgage Interest Rates Affect YOU!

This past week, 30-year fixed mortgage interest rates rose 0.22% on average for a borrower in New York with a credit score around 700.?

That might sound like NOTHING, but when you look at the numbers, 0.2% adds up.?

Below you have 2 mortgage payment calculations. With a rate of 3.29%, a person buying a $450K co-op might have a monthly payment of $2455. However, with a rate of 3.49%, that same purchase would come with a $2495 payment instead, an increase of $40 per month.?

You can imagine that with a bigger mortgage, AND/OR higher interest rates, your monthly payment could increase quite substantially. That same co-op purchase at a 4.49% interest rate would jump to a $2700 monthly payment, an increase of nearly $200 per month!??

Will interest rates keep rising??Most likely.?

With the economic recovery post-Covid underway and the Federal Reserve considering raising the federal funds rate in 2022 and 2023, mortgage interest rates will likely follow suit over time. Theoretically however, as interest rates increase, the growth in sales prices is set to slow down, stabilize, or even reverse slightly in order to maintain demand. Otherwise, if rates AND prices kept going up rapidly, no one would be able to afford a home! Only time will tell...

If you are interested in buying or selling a home, reach out to me!