If you are in the market to buy, sell, or upgrade, now is a great time to do so. Rising interest rates affect purchasing power greatly, as outlined below by Triplemint’s good friend Elise Leve of Citizens Bank:
Purchase Rate: $1,000,000
Down Payment: $200,000
Mortgage Amount: $800,000
Interest Rate: 4.125%
Term in Years: 30
Monthly Mortgage Payment: $3,877
ANTICIPATED 2019 RATE INCREASE:
New Higher Rate: 5.125%
New Higher Monthly Payment: $4,356
Additional down payment required to get monthly payment back down to $3,877: $87,917
The size the mortgage would have to be to get the payment back down to $3,877: $712,083
The new purchase price using the original down payment of $200,000: $912,083
The increase in rate will reduce your purchasing power by 9%
Read our December Market Update below!
Data courtesy of OLR Market Pulse and current as of 12/13/2018.
