Mortgage rates have hit their lowest point in over a year and a half. And thatโs big news if youโve been sitting on the homebuying sidelines waiting for this moment.
Even a small decline in rates could help you get a better monthly payment than you would expect on your next home. And the drop thatโs happened recently isnโt small. As Sam Khater, Chief Economist at Freddie Mac, says:
โMortgage rates have fallen more than half a percent . . . and are at their lowest level since February 2023.โ
But if you want to see it to really believe it, hereโs how the math shakes out. Take a closer look at the impact on your monthly payment.
The chart below shows what a monthly payment (principal and interest) would look like on a $400K home loan if you purchased a house back in April (this yearโs mortgage rate high), versus what it could look like if you buy a home now (see below):
Going from 7.5% just a few months ago to the low 6s has a big impact on your bottom line. In just a few monthsโ time, the anticipated monthly payment on a $400K loan has come down by over $370. Thatโs hundreds of dollars less per month.
Bottom Line
With the recent drop in mortgage rates, the purchasing power you have right now is better than itโs been in almost two years. Talk to a local real estate agent about your options and how you can make the most of this moment youโve been waiting for.
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