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Advice
Posted in: Getting a mortgage, Market insights, Buying a home

The mortgage interest rate factor

How interest rates affect afordability

Buying a house is one of the largest financial investments many people will ever make. Therefore, it makes sense that when people buy a house, they want to get a good deal.

One of the factors in determining how much you will pay for your home is the mortgage rate. The selling price of the home is easy to understand. By factoring in the interest rate, you will determine your monthly payment, as well as how much you will pay for a home over the lifetime of the loan.

When rates are low, home affordability increases. Conversely, when rates go up, the amount that buyers can afford decreases. In fact, when rates increase by 1 percent over their current level, the price of a home would have to drop nearly 11 percent to match today's payment.

Right now, mortgage rates are close to historic lows. While we don't know when mortgage rates will climb back up, it inevitably will happen. If you want to extend your buying power, consider buying a home today. We're here to help you get started.

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