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We’ve all heard the talk – “Interest rates are at historic lows”

Uh, great… So what does that mean to you and me?

Well, when I bought my home in Gainesville, rates were hovering around 6.5%. Right now it’s possible to get a 5% loan if your credit scores are good enough. If you and I both take out loans for $200,000 you will pay about $70,000 LESS than me. That is almost $200 per month. Wow

If you are waiting for Gainesville real estate prices to bottom out you should consider this:
How much do rates need to fluctuate to wipe out your bargin?
A rate increase to 5.2% brings your total interest paid up by apx $10,000… how much were you hoping to save on the purchase price?

For me, that means that I’ll be refinancing my house pretty soon…

Here are the numbers:

  • on a $200,00 loan at 6.5% = $1,264.14 Monthly Principal & Interest – 30 years $455,088.98 – total interest paid $255,088.98
  • on a $200,00 loan at 5.5% = $1,135.58 Monthly Principal & Interest – 30 years $408,808.08 – total interest paid $208,808.08
  • on a $200,00 loan at 5.0% = $1,073.64 Monthly Principal & Interest – 30 years $386,511.57 – total interest paid $186,511.57

You can save almost $70,000 on the same loan today compared to 18 months ago!

OR you can run your own numbers here:
http://www.amortization-calc.com/