Recently, I facetiously wrote a blog about why rising rates would crash the housing market, pointing out that they actually won’t 😊.

So – because of yesterday’s blog and because rates shot up again this morning – I wanted to remind everyone of just how little rate increases of less than 1% affect someone’s payment.

## 1/2% Rate Increase = \$150 Higher Payment For \$500,000 Mortgage

The below table shows the effect of higher rates on monthly payments for a \$100,000 mortgage.

A 1/2% increase in rates results in an increased payment of about \$27 to \$30 per month (higher rates result in higher payment increases).

NOTE: I am using a \$100,000 balance because it makes the math easy for estimating the effect of higher rates on larger mortgages, e.g. A \$200,000 mortgage will see 2 x \$30 (worst case) per month increase if rates go up 1/2%; a \$350,000 mortgage will see a 3.5 x \$30 per month increase; a \$600,000 mortgage will see a 6 x \$30 per month increase, and so on.

For a \$500,000 mortgage, a 1/2% increase in rates results in about a \$150 per month increase (worst case) in payment.

A \$1 million mortgage would see about a \$300 per month increase.

So – is it time to panic?

Probably not. 😊

Annual Percentage Rate (APR)Monthly Payment (15 Year)Monthly Payment (30 Year)
3.00%\$690.58\$421.60
3.25%\$702.67\$435.21
3.50%\$714.88\$449.04
3.75%\$727.22\$463.12
4.00%\$739.69\$477.42
4.25%\$752.28\$491.94
4.50%\$764.99\$506.69
4.75%\$777.83\$521.65
5.00%\$790.79\$536.82

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167

##### You are less than 60 seconds away from your quote.

Resume from where you left off. No obligations.