Mortgage interest rates have hit their lowest level in more than a year and a half. And that's great news if you've been waiting for this moment to buy a home.
Even a small drop in interest rates can help you secure a lower-than-expected monthly payment on your next home. And the recent drop is anything but small. As Sam Khater, Chief Economist at Freddie Mac, says:
“Mortgage interest rates have fallen by more than half a percentage point… and are at their lowest level since February 2023.”
But if you want to see it to believe it, here's how the numbers break down. Take a closer look at the impact on your monthly payment.
The chart below shows what a monthly payment (principal and interest) would look like on a $400,000 loan if you bought a home in April (when mortgage rates were higher this year), compared to what it might look like if you bought a home now (see below):
Going from 7.5% just a few months ago to a low of 6% has a major impact on your bottom line. In just a few months, the monthly payment on a $400,000 loan has dropped by more than $370. That means hundreds of dollars less per month.
Summary: With the recent drop in mortgage rates, your purchasing power is better now than it has been in nearly two years. Let's talk about your options and how you can make the most of this moment you've been waiting for.
Source: Keeping Current Matters