Small Changes Make a Big Difference

<photo: Mortgage Capital Associates>

It’s no surprise that mortgage rates are slowly rising. After holding around the 4% mark for years, it was bound to happen. The good news is that the pace IS slow. Yet even small bumps in the rate can mean a lot to your monthly bottom line. Case Shiller’s February 2017 report on the Greater Atlanta Metro Market covering results through January 2017 compares those differences in the chart below:

Mortgage 3.5% 30-Year Cost 5% 30-Year Cost 8% 30-Year Cost
$200,000 $898 $323,280 $1,073 $386,280 $1,467 $528,120
$300,000 $1,347 $484,920 $1,610 $579,600 $2,201 $792,360
$400,000 $1,796 $646,560 $2,147 $772,920 $2,935 $1,056,600
$500,000 $2,245 $808,200 $2,684 $966,240 $3,668 $1,320,480
$1 million $4,490 $1,616,400 $5,368 $1,932,480 $7,337 $2,641,320

Although we’re not expected to reach the 5% rate in 2017 – the Case Shiller report forecasts that the average increase across Fannie Mae, MBA, and NAR will rise to 4.63% in Q4 2017 – the numbers show how even small increases make a big difference. Another good reason to buy (vs. rent).

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