The mortgage rate has reached its lowest point in a year and a half, which is big news for those who have been waiting to buy a home.
Even a small decrease in interest rates can reduce your monthly payments, but this recent drop is no small change. As of September 16, the current rate is 6.12%, the lowest since February 2023.
If you want to see the real impact, take a look at how this affects monthly payments.
The chart below compares monthly payments (principal and interest) for a $400,000 loan if you had bought a home in April versus buying now.
Just a few months ago, rates were at 7.5%, but now they’ve dropped into the 6% range, significantly reducing monthly payments. For a $400,000 loan, the estimated monthly payment has decreased by over $370 in just a few months. This means you could be saving hundreds of dollars each month.
With the recent drop in mortgage rates, purchasing power is at its highest level in almost two years. If you’re looking to buy a home, now might be the perfect opportunity before more buyers enter the market.
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