Thursday, July 25, 2013 / by Kevin Hart
INTERESTING NUMBERS ON HOW THE RATE CHANGES PURCHASE PRICE...
Whether looking for a home in Columbus, OH market or anywhere for that matter you will want to read this article. Prices of homes in Dublin and Olentangy Schools have been on the rise and now rates are going up. If on the fence, the time to buy is now.
According to the BankingMyWay Weekly Mortgage Rate Tracker, 30-year fixed rate mortgages shot up again last week to 4.63% from 4.46%. In May and June, mortgages rates shot to 4.6% from around 3.5% in the past 60 days, to the highest levels since 2011, costing new homebuyers a fortune in the process.
How much are they potentially losing? Let's let the BankingMyWay Mortgage Calculator do the math:
Before May 1
Mortgage amount: $200,000 Term: 30-years, fixed rate mortgage Interest rate: 3.50% Monthly payment: $898.09 Total payments: $323,311.97 Total interest: $123,311.97
Since July 10
Mortgage amount: $200,000 Term: 30 years, fixed-rate mortgage Interest rate: 4.6% Monthly payment: $1,025.29 Total payments: $369,103.49 Total interest: $169,103.49
That's an extra $127 per month in mortgage payments, and approximately another $46,000 in mortgage interest payments over the course of 30 years -- all by waiting 70 days to buy a new home.
The trend is not just bad news for new homebuyers; it's a negative trend for homeowners looking to sell, as the rise in mortgage rates slows down the housing market's recent momentum.
That hasn't happened yet, but if mortgage rates continue to rise -- and many economists think they will -- fewer buyers may want to wade into a market roiling with high interest rates.