The median home price has recently increased from $412,000 in February to $424,900 by March end. As we approach the end of April, mortgage rates for a 30-year fixed loan have dropped slightly to 6.81%, down from 6.83% last week.
So, how does this affect your monthly mortgage payments? Let’s dive into the costs of buying a $424,900 home in today’s market, using current mortgage rates.
Monthly Mortgage Payment with 20% Down Payment
For a $424,900 home at today’s 6.81% mortgage rate, the typical monthly mortgage payment (excluding tax and insurance) would be around $2,218.
In comparison, last week’s 6.83% mortgage rate would have resulted in a monthly payment of $2,223—a difference of just $5.
Big Savings Compared to Last October
Looking back to October 2023, when mortgage rates peaked at 7.79%, buyers would have faced a much higher monthly payment of $2,445 on the same $424,900 home. This means buyers who close this week could save $227 per month, or $2,724 annually, compared to last year’s peak rates.
FHA Loan: Monthly Payment with 3.5% Down Payment
For buyers using FHA loans with a 3.5% down payment, the monthly payment at today’s 6.81% mortgage rate would be approximately $2,676.
In contrast, last week’s 6.83% rate would have cost $2,681, which is just a $5 difference. However, compared to the peak rates of 7.79% in October 2023, buyers today save $273 per month, as the monthly payment back then would have been $2,949.
Long-Term Savings Over 30 Years
Let’s look at the long-term savings. Over the life of a 30-year loan, the savings can be significant.
- 20% Down Payment: If you buy a $424,900 home at today’s 6.81% mortgage rate, you will pay a total of $798,584 over 30 years.
- If you had bought the same home in October 2023 with a 7.79% rate, the total payment would have been $880,067. That’s a savings of $81,483 over 30 years.
For buyers putting down 3.5%:
- FHA Loan: With a 3.5% down payment at today’s 6.81% rate, your total payment would be $963,291 over the life of the loan.
- If you had bought in October 2023 at 7.79%, your total cost would have been $1,061,580, saving you $98,289 over 30 years.
Take Advantage of Current Rates
Even small changes in mortgage rates can make a significant difference in your monthly payments and long-term savings. With the current 6.81% mortgage rate compared to last year’s peak rate, homebuyers can save thousands of dollars over the life of the loan. If you’re in the market for a $424,900 home, now might be the right time to secure a lower mortgage rate and enjoy the financial benefits.
Ready to Find Your Dream Home?
If you’re ready to take the next step toward homeownership, Brazoban Realty is here to help you navigate the mortgage process and secure the best deal. With today’s rates and our expert guidance, buying your dream home could be more affordable than you think!
Contact us today to learn more about how we can assist you in finding your perfect home.
Stay Informed and Save More!
Don’t miss out on the latest market updates, mortgage tips, and exclusive listings. Subscribe to our newsletter and get valuable insights delivered straight to your inbox!
Article Credit: Realtor.
