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    Amortization

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    elizabeth_w_ct
    This document shows how rising mortgage interest rates impact buying power for home buyers. It contains a table displaying the monthly mortgage payment for different interest rates ranging from 3.5% to 7% and for home prices ranging from $140,000 to $300,000. An example is given comparing a buyer in 2008 who qualified for a $230,000 mortgage at 6% interest to today at 3.75% qualifying for $300,000, despite prices falling 20% overall, demonstrating an increased buying power of $70,000 due solely to lower interest rates. The summary warns that this inverse relationship means buying power will decrease if rates rise from their current levels.

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    Amortization

    Uploaded by

    elizabeth_w_ct
    17 views1 page
    This document shows how rising mortgage interest rates impact buying power for home buyers. It contains a table displaying the monthly mortgage payment for different interest rates ranging from 3.5% to 7% and for home prices ranging from $140,000 to $300,000. An example is given comparing a buyer in 2008 who qualified for a $230,000 mortgage at 6% interest to today at 3.75% qualifying for $300,000, despite prices falling 20% overall, demonstrating an increased buying power of $70,000 due solely to lower interest rates. The summary warns that this inverse relationship means buying power will decrease if rates rise from their current levels.

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    This document shows how rising mortgage interest rates impact buying power for home buyers. It contains a table displaying the monthly mortgage payment for different interest rates ranging from 3.5% to 7% and for home prices ranging from $140,000 to $300,000. An example is given comparing a buyer in 2008 who qualified for a $230,000 mortgage at 6% interest to today at 3.75% qualifying for $300,000, despite prices falling 20% overall, demonstrating an increased buying power of $70,000 due solely to lower interest rates. The summary warns that this inverse relationship means buying power will decrease if rates rise from their current levels.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    17 views1 page

    Amortization

    Uploaded by

    elizabeth_w_ct
    This document shows how rising mortgage interest rates impact buying power for home buyers. It contains a table displaying the monthly mortgage payment for different interest rates ranging from 3.5% to 7% and for home prices ranging from $140,000 to $300,000. An example is given comparing a buyer in 2008 who qualified for a $230,000 mortgage at 6% interest to today at 3.75% qualifying for $300,000, despite prices falling 20% overall, demonstrating an increased buying power of $70,000 due solely to lower interest rates. The summary warns that this inverse relationship means buying power will decrease if rates rise from their current levels.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
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    Download as pdf or txt
    of 1

    What is the impact of rising rates on my buying power?

    Mortgage Amount / 30 year term

    Interest Rates

    3.50%
    3.75%
    4.00%
    4.25%
    4.50%
    5.00%
    5.50%
    6.00%
    6.50%
    7.00%

    140000

    150000

    160000

    170000

    180000

    190000

    200000

    210000

    220000

    230000

    250000

    260000

    270000

    280000

    290000

    300000

    310000

    628.66
    648.36
    668.38
    688.72
    709.36
    751.55
    794.90
    839.37
    884.90
    931.42

    673.57
    694.67
    716.12
    737.91
    760.03
    805.23
    851.68
    899.33
    948.10
    997.95

    718.47
    740.98
    763.86
    787.10
    810.70
    858.91
    908.46
    959.28
    1011.31
    1064.48

    763.38
    787.30
    811.61
    836.30
    861.37
    912.60
    965.24
    1019.24
    1074.52
    1131.01

    808.28
    833.61
    859.35
    885.49
    912.03
    966.28
    1022.02
    1079.19
    1137.72
    1197.54

    853.19
    879.92
    907.09
    933.57
    962.70
    1019.96
    1078.80
    1139.15
    1200.93
    1264.07

    898.09
    926.23
    954.83
    982.71
    1013.37
    1073.64
    1135.58
    1199.10
    1264.14
    1330.60

    942.99
    972.54
    1002.57
    1033.07
    1064.04
    1127.33
    1192.36
    1259.06
    1327.34
    1397.14

    987.90
    1018.85
    1050.31
    1082.27
    1114.71
    1181.01
    1249.14
    1319.01
    1390.55
    1463.67

    1032.80
    1065.17
    1098.06
    1131.46
    1165.38
    1234.69
    1305.91
    1378.97
    1453.76
    1530.20

    1122.61
    1157.79
    1193.54
    1229.85
    1266.71
    1342.05
    1419.47
    1498.88
    1580.17
    1663.26

    1167.52
    1204.10
    1241.28
    1279.04
    1317.38
    1395.74
    1476.25
    1558.83
    1643.38
    1729.79

    1212.42
    1250.41
    1289.02
    1328.24
    1368.05
    1449.42
    1533.03
    1618.79
    1706.58
    1796.32

    1257.33
    1296.72
    1336.76
    1377.43
    1418.72
    1503.10
    1589.81
    1678.74
    1769.79
    1862.85

    1302.23
    1343.04
    1384.50
    1426.63
    1469.39
    1556.78
    1646.59
    1738.70
    1833.00
    1929.38

    1347.13
    1389.35
    1435.25
    1475.82
    1520.06
    1610.46
    1703.37
    1798.65
    1896.20
    1995.91

    1392.04
    1435.66
    1479.99
    1525.01
    1570.72
    1664.15
    1760.15
    1858.61
    1959.41
    2062.44

    Example: A buyer in 2008 who qualified at 6% for a $230,000 mortgage can qualify today at 3.75% for a 300,000 mortgage. That
    $300,000 house, assuming a 20% reduction in prices over the last 4 years, was a $375,000 house in 2008. That is an increase in
    buying power of $70,000 without an increase in payment - all a result of decreasing mortgage interest rates. Remember the inverse
    in buying power will occur if rates rise.

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