Mortgage interest rates have reached their lowest level in over a year and a half. And that's great news if you've been waiting for this moment to buy a house.
Even a small drop in rates can help you get a better than expected monthly payment on your next home. And the drop that occurred recently is not small. As Sam Khater, Chief Economist at Freddie Mac, puts it:
"Mortgage interest rates fell by more than half a percentage point... and are at their lowest level since February 2023."
But if you want to see it to really believe it, here's how the numbers work out. Take a closer look at the impact on your monthly payment.
The graph below shows what a monthly payment (principal and interest) on a $400,000 loan would look like if you bought a house in April (when mortgage rates were higher this year), compared to what it might look like if you bought a house now (see below):
Going from 7.5% just a few months ago to the low 6% has a big impact on your bottom line. In just a few months, the monthly prepayment on a $400,000 loan dropped by more than $370. That's hundreds of dollars less per month.
Summary With the recent drop in mortgage rates, the purchasing power you have now is better than it has been in almost two years. Let's talk about your options and how you can make the most of this moment you've been waiting for.
Source: Keeping Current Matters