What Home Buyers Need to Know About Rising Rates

Sep 27, 2018
   

If you’re thinking about buying a home, then you’re probably well aware that interest rates have been on the rise over the past year or so – ultimately impacting mortgage, or home loan, rates. In fact, mortgage rates are now the highest they’ve been in the past seven years.

And while the increases may seem small – the 30-year fixed rate has averaged 4.46% throughout the year, up from 3.99% in 2017 – those little increases can really add up.

Photo of mortgage rates

Tiny increases make a big difference

Don’t be fooled by rates rising just a quarter of a percent – those small changes can make a big impact on your bottom line.

How much more could you end up paying?

Here’s one scenario from Realtor.com…Current mortgage rates are about 4.65% on 30-year, fixed-rate loans.

If they increase by just one full percentage point, it will cost typical homebuyers an additional $147 a month – or almost $53,000 – over a 30-year period.

Even much smaller increases add up. If mortgage rates tick up by just 0.05%, it can cost typical buyers $2,600 or more over the life of their 30-year loans.

Rates are expected to keep rising

If you’ve been thinking about buying a home, now might be the time. Rates are expected to go up a couple more times this year. In fact, some experts predict rates to rise between 5.5% and 6% over the next two years if the economy continues to stay strong.

Thinking about make a move?

We’re here to help! Contact your neighborhood loan officer to find out more about our home buying options.