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How Much Money Do You Lose with Increasing Interest Rates?


Increasing Interest Rates Graph says:

 Increasing interest Rates

Impact of Increasing Rates

 As you know interest rates fluctuate all the time

Although rates are very low and still remain that way you certainly don’t want to miss the lowest rate.   A good rule of thumb for refinancing is if you can save 1 point or more it’s worth the cost of the refi.   Same is true if your buying.   The graphic above shows the difference between 3.4% and 4.4% loan of $200K.

  • The difference is $114.56 a month.  
  • That’s $1374.72 a year and
  • $41,241.16 over 30 years.

So how much money do you lose?

Hard to say.  It depends if you stay 30 years or what happens in your life, you can’t predict that as much as you’d like to.  Right?  The point is:

  • 1 point makes a huge difference, heck even .5 is huge depending on what your borrowing.

This is one of the main reasons for the buyer demand now

Nobody wants to lose the lowest rate or big bucks.  If you look at your monthly payment and do the math the savings is huge.  Another reason sellers should make a move as well even if you’re up or downsizing it’s still going to cost you more.   Safe to say you can lose a boat load of  money with increasing interest rates.

How much will rates go up this year?

 Only Bernanke knows for sure.

About Terry W. Smith

Passionate about real estate, positive problem solver, specialty boutique real estate brokerage that does things your way! A full-time Broker & REALTOR®, helping people buy and sell homes in the Dallas - Plano area. Whether you're a buyer just starting out or someone with luxury properties to sell. I have extensive knowledge and experience to help you with your real estate transaction. I am a native Dallasite & know stuff, ask me...

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