Long-term mortgage rates remain just below 3% and just above their all-time record low. A year ago, rates were 56 basis points higher. UrbanTurf has taken its semi-regular look to see how the much lower rates are impacting mortgage payments.
A home with a $800,000 purchase price, they assumed the buyer had excellent credit. Using the current rates and rates from last year, they examined how monthly mortgage payments changed. In each case, they assumed the buyer put down a 20 percent down payment. Note that these include principal and interest, but not the cost of insurance or taxes.
Here are the two scenarios:
August 2019: The average mortgage rate was 3.55 percent.
Monthly mortgage payment: $2,892
Total outlay on mortgage (monthly payment x 360 months): $1,041,039
August 2020: The average mortgage rate is 2.99 percent.
Monthly mortgage payment: $2,695
Total outlay on mortgage (monthly payment x 360 months): $970,132
The difference between a rate of 3.55 percent and 2.99 percent is about $200 a month or $70,907 over the life of the loan.