Are Mortgage Rates Gonna Go Up?

Guest Author: MATT FALCONER, Senior Loan Officer at O2 Mortgage

"Are mortgage rates gonna go up?” 

Boy, I’d be willing to bet I get that question just about as often as Realtors get: “Is the market softening?”

We know that there are a lot of fence-sitters out there, waiting for home prices to move lower. But what is the cost of waiting? A great rule of thumb to for future homebuyers is that a 1% increase in interest rates decreases your buying power by about 8% (when including property tax and insurance)!

Here’s an example for reference:

Today

  • $1,000,000 purchase
  • 20% down ($200,000)
  • 4.5% rate

Monthly principle, interest, tax & insurance = $5,195

Next Year

  • $920,000 purchase
  • 22% down ($200,000 to equate to first example)
  • 5.5% rate

Monthly principle, interest, tax & insurance = $5,146

So is waiting really worth it? 


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Matt Falconer is a Senior Loan Officer at O2 Mortgage and has worked in the mortgage industry for over 12 years. 

(831) 435-9197  |  matt@o2mtg.com  |  NMLS #380797

Matt grew up and lives in Santa Cruz, CA.