The Wall Street Journal published a chart that shows how lower interest rates on 30 Year fixed mortgages would affect the monthly payment which I’ve republished here in the table below.
Good news this week brings us lower interest rates down from 6% to 5.5%. When you consider that this is the largest single week drop in interest rates in 27 years then you may see that now is the time to buy.
According to the table, the savings on a lower mortgage rate will outpace the difference in price down the road. In other words, if you wait for the prices of homes to continue to fall at the same time the interest rate increases, the savings you think you’ll realize will be wiped out by the additional interest you’ll pay over time. It makes perfect sense to give more credence to your rate of interest than your potential loss, one of which is known and the other not.
Month after month we’re amazed at how low the rates are. There’s even a buzz about rates going even lower! Can you imagine being able to buy your first home for as much as you’re paying in rent now?
Stay away from the fence and jump to ownership, but remember, only if you are qualified to buy. Don’t try to buy something you can’t afford.