Mortgage rates this week for a 30-year fixed loan fell to 6.84%, down from 6.85% last week.
So what impact does this have on your monthly mortgage payment? And what does this mean for homebuyers?
Here’s the monthly cost of purchasing a typical home today, according to the Realtor.com®mortgage calculator.
Monthly mortgage payment today with a 20% down payment
The typical monthly payment on a median-priced $440,000 home at today’s 6.84% mortgage rate is roughly $2,304. (That’s assuming a 20% down payment and excluding tax and insurance.)
Last week, a median-priced home at a 6.85% mortgage rate would have cost homebuyers $2,307 per month—$3 more than what buyers would pay today.
Yet, if you examine the peak mortgage rate of 7.79% in October 2023 and then compare those payments with loan installments today, homebuyers are way better off now than they would have been then.
In October 2023, buyers would have paid $2,532 monthly on a $440,000 home with 20% down, which means homebuyers today can save $228 a month—or $2,736 a year—compared with buying when rates peaked.
Monthly mortgage payment today with a 3.5% down payment
For most borrowers, FHA loans require a 3.5% down payment.
Assuming a 3.5% down payment and excluding tax and insurance, the typical payment at today’s 6.84% mortgage rate on a median-priced $440,000 home is roughly $2,779 per month.
Last week, a median-priced home at a 6.85% mortgage rate would have cost homebuyers $2,782 per month—$3 more than what buyers would pay today.
Nonetheless, mortgage payments at today’s rates on a median-priced home are still a $275-per-month improvement over October 2023, when a median-priced home at a 7.79% mortgage rate would have cost homebuyers $3,054 per month.
Long-term savings over 30 years
When you multiply these monthly savings by 30 years, they add up dramatically.
If you buy a $440,000 house at today’s 6.84% rate with a 20% down payment, you’ll pay a total of $829,499 over the life of a 30-year loan.
If you’d bought that same $440,000 home with 20% down in October 2023, when rates peaked at 7.79%, that loan would end up costing you $911,343.
Total savings over 30 years: $81,844.
Now, let’s turn our attention to FHA loans.
If you put down 3.5% on a $440,000 house financed at 6.84% today, you’ll pay $1,000,583 over the life of the loan.
If you’d put down 3.5% on a $440,000 home in October 2023, when rates peaked at 7.79%, you’d pay $1,099,307.
Total savings over 30 years: $98,724.
