How does a 1% interest rate affect mortgage payment?

It’s a common understanding that lower interest rates mean lower mortgage payments.  As the economy continues to improve, interest rates will continue to increase.  With current rates hovering around 4.25%, it’s likely that they’ll increase to above 5% by the end of 2014.  The infographic below (presented by Zillow.com) shows how this impacts buyer mortgage payments.

So how does a 1% interest rate affect a buyer mortgage payment?  Although the monthly difference isn’t overly significant, the difference over the life of the loan is.  What should you take away from this?  Buying a home while the interest rates remain low will help save  thousands of dollars.  If you can afford to buy now, take advantage of the current market conditions!

Hampton Roads Real-e-statement is written by Alyssa Godwin, a Realtor with Liz Moore and Associates. For questions regarding buying or selling contact Alyssa at 757-329-6161 or alyssagodwin@lizmoore.com. You can also find Alyssa on Facebook or on the web at www.lizmoore.com/alyssagodwin.