How Much Will Your Monthly Payment Change?
(Excerpted from “How Much Will Your Monthly Payment Change?” by Nadia Evangelou for NAR.realtor)
Mortgage rates are still historically low, but crossing over to the four-percent range raises worries to potential homebuyers. But, should they be worried? How much can this rise of mortgage rates change their monthly payment? How does this change of monthly payments vary by county?
We calculated the monthly payment by county based on the mortgage rate prevalent a couple of months ago (3.5 percent), the rate as of early January (4.2 percent) and a higher rate likely to be seen within the next two years (5.0 percent).
But the effect depends on the location:
NAR expects that the 30 year fixed-rate will increase to 4.4 percent in 2017 and 4.8 percent in 2018 while home prices are expected to rise 3.9 and 3.2 percent, accordingly. Rising prices, in addition to rising mortgage rates, will push the monthly cost of housing up even higher for new homebuyers. Existing homeowners will have the same monthly payment for those who took out fixed rate mortgage.
*The estimated average home value in 3Q2016, assuming a 12% down payment. Arizona’s average down payment was 11.99% in 2016; details here.Tags: monthly payment, mortgage rates, Nadia Evangelou