New Home Tips, Trends, and Ideas - Raleigh Custom Home Builders

Interest Rate Trends - What Will a 3 Point Increase Do?

Posted by Stanton Homes Design on Tue, Mar 22, 2011 @ 08:03 AM

Interest Rate Trends

Historically low interest rates - we keep hearing the words, but what do they mean? Is there really that big of a difference? Where are interest rates now?

Interest Rate Trends 1963 to 2010

This chart shows just how compelling interest rates have been over the past year.

Rates really are the lowest they've been in half a century – just look at this graph showing interest rate trends over the past 47 years .

National Average Contract Mortgage Rate 1963 to 2010

Interest Rate Trends | Buying a New Custom Home

Copyright © 2010
Reprinted with permission

How Much More Home Can a Lower Rate Buy?

The exact same home costs less when interest rates are lower. Here’s the bottom line:

Sample principle and interest payments for the same $250,000 loan, at four different interest rates.

Interest Rate Trends | More House for Less Money

    • The same $250,000 home will cost $175,289 more at a 7.75% interest rate than at a 4.75% interest rate, over a 30 year period.
  • The same $250,000 home will cost $479 more per month, or $5748 more per year, at a 7.75% interest rate than at a 4.75% interest rate.

Does a lower interest rate mean I can buy a different home than I could a few years ago?

Yes!  Here's an example.

Interest Rate Trends

At 4.75%, a $1300 monthly principle and interest payment can apply towards a home with a 20% higher price tag than a $1300 payment with a 6.75% interest rate.

The same $1800 monthly payment can apply towards a $250,000 or a $345,000 home, depending on the interest rate.

Will we see interest rates this low again in our lifetime?

Interest Rates


Copyright © 2010
Reprinted with permission

Interest rates are still incredibly low right now, but they are creeping back upwards from recent historical lows. 

Will we see rates this low again in our lifetime? Probably not. In fact, based on these graphs, we’ll probably be paying a lot more, very soon.

Check with your lender for today's rate, and learn how you can take advantage of this historical opportunity before rates continue to rise. 

*Stanton Homes is not a lender, and is not affiliated with a lender.  Calculations generated by online mortgage calculators, for principle and interest only.  Check with your lender for rates and payments specific to your situation.  Interest rates, payments, and other details will be verified with your lender.

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