How would a 1% mortgage rate change impact buyers?


How would a 1% mortgage rate change impact buyers?


NEW YORK – March 13, 2015 – Even the slightest movement in mortgage rates can translate into more – or less – purchasing power for homebuyers.

John Burns Real Estate Consulting recently looked at how the fluctuation in rates affects the average consumer. The firm found that a typical family earning $60,000 a year (assuming a 36 percent front-end debt-to-income ratio) could afford around $1,800 month for the mortgage payment.

In 2000, a 30-year fixed-rate loan, which averaged an 8 percent mortgage rate, would have qualified that family for a $245,000 loan.

But at a 4 percent mortgage rate – which current rates are averaging – that same family can qualify for a $377,000 loan.

Source: "How Tiny Mortgage Rate Moves Can Buy You a Lot," CNBC (March 10, 2015)

© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688

Ready to live the Florida Keys Dream? Contact us online or call (239) 851-3861 today.

Serving the Florida Keys from Key Largo to Key West and everywhere in-between like Tavernier, Plantation Key, Islamorada, Duck Key, Marathon, Big Pine Key, Summerland Key, and more! Ask us about Long Key, Upper Matecumbe, Lower Matecumbe, Hawks Cay, Key Colony, Key Colony Beach and Stock Island.