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Last week the average interest rate for a 30-year fixed mortgage dropped to 4.06%. A year ago, it was around 4.40%. According to CNBC this is the largest decline in 10 years.

The drop-in interest rates was somewhat surprising. Most experts have predicted rates above 5% for this year.

How New Rates Impact Your Mortgage Payment

Lower interest rates are great news for home buyers who have been fighting quickly rising home prices. ​

Let’s assume you borrow $200,000 from a bank. Your mortgage payment at 4.40% would be $1,002 a month (principal and interest, not including taxes and insurance).

At today’s lower interest rate of 4.06% your monthly payment would go down to $962.

You save $40 a month, $480 per year, or $14,400 over the lifetime of the loan. ​

Has Your Affordability Increased?

The average sales price has increased by 4.7% since February 2018. A home that cost $200,000 a year ago would sell for $209,400 in 2019.

For the $200,000 home you would have paid $1,002 per month a year ago, assuming you get 100% financing at a 4.40% interest rate.

Today you would have to get a $209,400 mortgage to buy the same house. At the lower interest rate of 4.06% your monthly payment would be $1,007.

Your monthly payment only increased by $5, so your affordability is the same as a year ago.

Don’t wait till interest rates go back up again!

​​Call or text me TODAY at (614) 975-9650 and let me help you find your dream home!

Susanne Novak has been a Realtor since 2007. She is the broker and owner of RE/MAX 24/7 in the Dublin Historic District. Susanne typically helps 50-60 families each year with their real estate needs. She's your trusted advisor when you search for your dream home, and a skilled negotiator when she lists your property to get top dollar when you sell.

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