Lower Interest Rates can lower monthly payment or increase buying Power!
Granted a lower interest rate will reduce the amount of interest paid during the term of a loan. A lower interest rate can increase buying power as well. A difference of 2% interest on the principal can make up to a 28% difference on the monthly payment obligation.
Below is an example of interest to borrowed amount;
$100,000 at 6% for 15 Years = $844.00
$100,000 at 4% for 15 Years = $740.00
$100,000 at 6% for 30 Year = $600.00
$100,000 at 4% for 30 Years = $477.00
Here is an example of increased buying power with lower interest.
$600 at 6% for 30 Years = loan amount $100,000
$600 at 5% for 30 Years = loan amount $111,700
$600 at 4% for 30 Years = loan amount $125,600
These examples do not include other expense like taxes, insurance, pmi insurance, maintenance, utilities and any other fees. Check with your lender for exact details on any loan and terms.
David Gardner is an Associate Broker with Apex Realty Group in Hunington County, PA. David is an experienced real estate agent who represents clients in the sale or purchase of residential, commercial, and investment properties. He also provides services for the seasonal vacation rental communities of Raystown Country. Contact David today for more information.