Real Estate News

September 9, 2024

$520 A Month: The Difference 9 Months Makes In Interest Rates

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by UrbanTurf Staff

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Long-term mortgage rates, while still high compared to several years ago, have dropped notably since the end of 2023. So today, UrbanTurf is taking a look to see how current rates are impacting mortgage payments compared to nine months ago.

We took a home with an $800,000 purchase price and assumed the buyer has excellent credit. Using current rates and rates from late December, we examined how monthly mortgage payments changed. In each case, we assumed the buyer put down a 20 percent down payment. Note that these include principal and interest, but not the cost of insurance or taxes.

Here are the two scenarios:

December 2023: The average mortgage rate was 7.2 percent.

Monthly mortgage payment: $4,480
Total outlay on mortgage (monthly payment x 360 months): $1,612,802

September 2024: The average mortgage rate is 6.3 percent.

Monthly mortgage payment: $3,961
Total outlay on mortgage (monthly payment x 360 months): $1,426,000

So, the difference between rates is $519 a month or about $187,000 over the life of the loan.

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This article originally published at https://dc.urbanturf.com/articles/blog/520_a_month_the_difference_9_months_makes_in_interest_rates/22688.

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