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: