Historic mortgage jumped recently, but they seem to be steadying for now. This report from the Washington Post shows that rates have risen from last summer’s all time lows of 3.62% for a 30 year fixed-rate to 4.51% in mid July 2013. They have dipped a bit and are currently hovering at 4.4%.
So, what does 1% mean with interest?
Let’s suppose that you were to buy a home for $250,000 at 3.62%. If you punch that into the calculator, you will see:
Now, let’s add “just” 1% to this mortgage.
The takeaway:
All other things equal, “just” 1% in mortgage rate increase could cost you money. In this case, it would cost over $50,000. That is, of course, if you keep the loan for 30 years. Interest rates make a big difference.
