The results are as follows:
So what's it all mean? Easy when you know how to calculate a monthly payment, and even more interesting when you look at the history.
The 30-year mortgage rate at 4.17% means that, for every $100,000 you borrow, your monthly payment will be $487.27. For that money, you will pay a fee at closing of 0.6% of the amount you borrow, so for every $100,000 you borrow, that will be $600.
The less oftentimes used 15-year mortgage rate at 3.30% results in a monthly payment of $748.24 for every $100,000 borrowed. The fee for those monies is less at 0.5%, only $500 for every $100,000 borrowed.
Not bad. But know that it's not bad solely because we're used to this. Take a look over the past year to where interest rates have been.
That top blue line shows the history over the past year of 30-year money. The red line under it is 15-year rates. Note what happened about this time one year ago. Ouch. The rates increased a solid 1/2 percent, and for the most part stayed there most of the year. We're seeing mildly better rates in the past 2-3 months, but it's pretty flat. We're used to it.
That's a far cry from when the Bank of the United States was created in 1791, with Alexander Hamilton at the helm. Rates at that time were a bit worse than 7%.
Call me as you need. I'm always here for you.
Enjoy the day,