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Mortgage rates this week for a 30-year fixed loan decreased slightly to 6.56%, down from 6.58% last week.
So what effect 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 $439,450 home at today’s 6.56% mortgage rate is roughly $2,236. (That’s assuming a 20% down payment and excluding tax and insurance.)
Last week, a median-priced home at a 6.58% mortgage rate would have cost homebuyers about $2,241 per month—just $5 more than what buyers would pay today.
Yet if you examine the peak mortgage rate of 7.79% in October 2023 and 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 $2,537 monthly on a $440,950 home with 20% down. That means homebuyers today can save about $301 a month—or $3,612 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 6.56% mortgage rate on a median-priced $439,450 home is about $2,697 per month.
Last week, a median-priced home at a 6.58% mortgage rate would have cost homebuyers roughly $2,703 per month—about $6 more than today.
Still, mortgage payments at today’s rates are a huge improvement over October 2023, when a median-priced home at a 7.79% mortgage rate would have cost homebuyers $3,060 per month. That’s a $363-per-month savings for today’s buyers.
Long-term savings over 30 years
When you multiply these monthly savings by 30 years, they add up dramatically.
If you buy a $439,450 house at today’s 6.56% rate with a 20% down payment, you’ll pay a total of $804,956 over 30 years.
If you’d bought that same $439,450 home with 20% down in October 2023, when rates peaked at 7.79%, that loan would end up costing you $913,310.
Total savings over 30 years: $108,354.
Now, let’s turn our attention to FHA loans.
If you put down 3.5% on a $439,450 house financed at 6.56% today, you’ll pay about $970,978 over the life of the loan.
If you’d put down 3.5% on a $439,450 home in October 2023, when rates peaked at 7.79%, you’d pay $1,101,681.
Total savings over 30 years: $130,703.