When it comes to the brass tax, you’ll pay less money per month for the same mortgage that previously had higher rates. If you borrowed five-hundred thousand dollars in January of 2020, your mortgage payment would have been around $2300 based on a 2.79% mortgage.
Now at 1.99%, your payment goes down to $2100.
That is a saving in payments over the five-year term of $12,000, it’s crazy. You will also owe less at the end of the five-years since your rate is lower. The mortgage that was at 2.79% would result in a balance owing of around about $425,000 while the mortgage at 1.99% would result in owing about $418,000 it’s a crazy big difference.
You will pay less interest over the term of that mortgage and more will go to principle, which results in paying your mortgage off quicker.
Because of these super low interest rates, there’s mortgages out there right now with rates of $423 per every one hundred thousand dollars borrowed, making it one of the best times to take out a new mortgage.
For a more in-depth look at the numbers, click HERE to a comparison we ran in June.