Where are mortgage rates headed?
If you are determining how much house you can afford, one factor that can make a big difference is mortgage rates. Even a small shift in mortgage rates can make a big difference in your monthly payments.
How mortgage rates affect monthly payments
Let's say you are borrowing $200,000 with a 30-year fixed-rate home loan.
- With a mortgage rate of 5.0 percent, your monthly principal and interest payment will be $1,073.64.
- If your credit or income history qualifies you for a mortgage rate of 6.5 percent, your monthly principal and interest payment increases to $1,264.14, or $190.50 more per month.
Some borrowers may not be able to qualify for the larger monthly payments and will need to borrow less.
Mortgage rate trends
While mortgage lenders change mortgage rates daily, you may want to look at current mortgage rates on a daily, weekly or monthly basis if you are still in the process of preparing to buy a home or searching for the right home.
You can read weekly and two-month on HSH.com to see what experts are predicting for mortgage rates. There are a lot of factors which affect mortgage rates, not the least of which is growth in the economy, inflation and inflation concerns, Federal Reserve monetary policies, and more. To get a working handle on how all this comes together, please read our article present in the 'recommended reading' section below, and use the tools above to track the market.
Michele Lerner contributed to this answer.