The price you might pay for waiting too long to purchase…

The California Association of Realtors just fabricated the graphic below to illustrate how rising interest rates can affect your monthly mortgage payment. They figured the increase on a $150,000.00  30-year mortgage. That’s a very low principal amount for buyers of San Francisco real estate. In order to see how a rise in rates would impact your payment, multiply the principal and interest payment at the bottom of the picture by 5. That will show you the change in the  mortgage payment for a borrowed mortgage of $750,000.00.

Here’s how it works out using the monthly payment on a fully amortized 30-year mortgage of $750,000.00..

at 4% the payment is: $3,580.60

at 4.5% the payment is: $3,800.15

at 5% the payment is: $4,026.15

at 5.5% the payment is: $4,258.40

at 6% the payment is: $4,496.65

at 6.5% the payment is: $4,740.50

at 7% the payment is: $4,989.75

The difference in monthly payments between 4% and 4.5% is $2,634.60 a year and over the life of the loan you’d be paying an extra $79.038!!