What about interest rates?

Interest rates are still rising. It’s important to keep in mind that for every point the interest rates rise, a buyer’s buying power is reduced by 10%. This is because their monthly payment increases. 

Here’s an example. Let’s say you are financing $500,000 and your interest rate is 4%. Your monthly payment would be $3,079. If your interest rate rose to 5%, your monthly payment would increase about $300 to $3.376 – just about 10%.

Everyone expects rates are still likely to rise by another 1.5-2% before the end of the year. If you’re in the market to buy, sooner is still better. I recommend most of my buyers consider 7-10 year ARM’s (Adjustable Rate Mortgages) which can reduce the rate by up to 1%. The idea is to wait until the interest rates come back down and refinance to a fixed rate mortgage.

If you want to see how the current rates will impact you, reach out to me and I’ll get you in touch with one of my trusted mortgage brokers.