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    On Sale

    With interest rates so low, one could argue that money is essentially on sale.

    It’s actually half off.

    30-year mortgage rates hit 3.75% which is exactly half of their long term average.

    Rates have averaged 7.5% over the last 40 years so today buyers are getting half of that rate.

    The “sale” on mortgage rates creates a significant savings in monthly payment because of the 1%/10% rule.

    For every 1% change in interest rate, the monthly payment will change roughly 10%.

    So when rates go up to 4.75%, a buyer’s payment will be 10% higher.

    For example, the principal and interest payment on a $400,000 home with a 20% down payment at today’s rates is $1,482.

    If rates were 1% higher, the payments jump up to $1,669.

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