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Effect of home price and interest rate increases on monthly payments


cashnocredit
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Thought I'd throw out some info for people to plan.

 

The monthly payments on a 30 year mortgage on the average home in the USA has gone up over 50% in the last year. Yeah, you heard that right. Over 50%.

 

Interest rates went from a bit below 3% to a bit below 5% (latest data Feb 2021-Feb 2022). Average home prices have increased just under 20%. The 2% interest jump alone increased mortgage payments 27%. Since these add on top of each other it comes to a bit over 50%. I had no idea it was that much until calculating it just now.

 

In the future, for the same $ mortgage, each 1% increase in interest rates will increase your mortgage payments roughly from 12% decreasing to 10% each step up to 9% APR. That was the APR on my condo in 1977.

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