According to Freddie Mac’s latest Primary Mortgage Market Survey, interest rates for a 30-year fixed rate mortgage are currently at 4.09%, which is still very low in comparison to recent history!

The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.

Purchasing power, simply put, is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain monthly housing budget.


The chart below shows what impact rising interest rates would have if you planned to purchase a home within the $300,000 price range, and planned to keep your principal and interest payments at or about $1,400 a month.

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5%, (in this example, $7,500).


And this chart below shows what impact rising interest rates would have if you planned to purchase a home within the $500,000 price range, and planned to keep your principal and interest payments at or about $2,325 a month.

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5%, (in this example, $12,500).


Finally, the chart below shows what impact rising interest rates would have if you planned to purchase a home within the $800,000 price range, and planned to keep your principal and interest payments at or about $3,725 a month.

Again, with each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5%, (in this example, $20,000). Experts predict that mortgage rates will be closer to 5% by this time next year.

(Didn't see your price range? We have charts from $100,000 to $1,000,000, just contact us and we will forward to you the appropriate chart.)


Act now to get the most house for your hard-earned money!


Equally, if you are thinking about selling, the sooner you get your house on the market the better opportunity you have to get it sold fast and for the most money. As interest rates climb, the available buyer pool will shrink as their buying power diminishes.