Mortgage Rates Affect Monthly Payments More Than You Think

While most home buyers know that the sales price they agree to pay for their next home will impact how much their next monthly mortgage payment will be, I believe home buyers should pay as much, if not more, attention to their mortgage rate.


When a home sale price rises by one percent from $300,000 to $303,000, your monthly mortgage payment on the home will usually rise by one percent or less. But when mortgage rates for a $300,000 home climb by one percent from 4.5% to 5.5%, your monthly mortgage payment on the same home will spike by close to ten percent or more! If you’re not doing everything you can to qualify for the lowest home mortgage rate possible, you are leaving an incredible amount of money on the table.

Yes, wild home price fluctuations make sexy headlines.

See “Home Prices Drop 18% in October,” “Home Prices Falling Faster in Biggest US Cities,” “Spring Buying Boosts Home Prices in 13 US Cities,” and “US Home Values Post Largest Monthly Gain Since 2006.”

However, mortgage rates make low monthly payments. And I think low monthly payments are pretty sexy.

For more home buying tips, visit our Buy With Us page!

Source: Primary Mortgage Market Survey® data provided by Freddie Mac

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About Doug Hill

Doug Hill is an Associate Broker with Coldwell Banker Residential Brokerage, and founded The Hill Group with his wife, Kirsten in 2003. Combined, they have helped over 1,000+ clients buy and sell homes in the Phoenix Metropolitan Area. Doug holds a Bachelor's Degree in Business Management & Economics, and is a Navy veteran. He is an active member of the Southeast Valley Regional Association of Realtors on their Professional Standards Board, and he and his wife have had the #1 team for Coldwell Banker in Arizona for multiple years in a row. He loves to read, travel, and spend time with his family and friends.
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