The national average interest rate on a 30-year fixed mortgage is an astonshing 4.29%. Many buyers were obviously motivated by the tax credits last year and unfortunately the record-low interest rates get overshadowed. Are these rates a better benefit to make the decision to buy now if you are considering purchasing a home? Well let's do the math and you'll see that the truth is that these rates are the better benefit.
Let's take a $100,000 loan at 30 years fixed today at 4.50%.
- Payment would be $506.69 (principal and interest)
- Total interest over the life of the loan would be $82,406.71 or $2,746.89 per year
That same loan of $100,000 at 30 years fixed just 1% higher at 5.50% would be:
- Payment of $567.79 (principal and interest) or $733.20 more per year
- Total interest over the life of the loan would be $104,404.04 or $3,480.13 per year
The difference in the cost of the two loans year over year would be $4,213.33 combining the additional payment amount and interest. Over the life of the loan the savings in interest is an whopping $21,997.33! So are these interest rates a better benefit to buyers today? Absolutely.
Start your Palm Coast or Flagler County, FL home search today at PalmCoastHomeShow.com or contact me so we can get your custom plan today.