Now that mortgage rates have gone absolutely haywire, I decided it would be prudent (and helpful) to create a “mortgage rate chart” that displays the difference in monthly payment across a variety of interest rates and loan amounts.
So if you were quoted a rate of 3.5% on your 30-year fixed mortgage two weeks ago, but have now been told your home loan rate is closer to 4%, you can see what the difference in monthly payment might be, depending on your loan amount.
This is pretty important when purchasing real estate, as a significant jump in monthly mortgage payment could mean the difference between a loan approval and a flat out denial.
30-Year Fixed Mortgage Rate Chart
My first mortgage rate chart highlights monthly payments at different rates for 30-year mortgages, with loan amounts ranging from $100,000 to $1 million.
I went with a bottom of 3.5%, seeing that mortgage rates were around that level about a month ago, and probably won’t return there (EVER).
However, there is the possibility that rates could drift back in that direction. And one might be able to buy their rate down to around that price, assuming they want an even lower rate.
For the high-end, I set interest rates at 6%, which is where 30-year fixed mortgage rates were for many years leading up to the mortgage crisis. With any luck, they won’t return there anytime soon…
Of course, they could rise even higher over time, but hopefully rates won’t climb back to the double-digits last seen in February 1990.
That fear aside, this mortgage payment chart should give you a quick idea of the difference in monthly payments across a range of mortgage rates and loan amounts, which should save some time fooling around with a mortgage calculator.
Below is a mortgage payment chart for 15-year fixed mortgages, which are also quite popular. I used a floor of 3% and a max rate of 5.50%. Again, rates can and probably will climb higher, just hopefully not anytime soon.
15-Year Fixed Mortgage Rate Chart
For the record, you can obtain mortgage rates at every eighth of a percent, so it’s also possible to get a rate of 3.625%, 3.875%, 4.125%, 4.375%, and so on. But for the sake of simplicity, I spaced it every quarter of a percent.
These charts are really just a quick reference guide to get ballpark payment amounts. If you’re getting serious about home buying or looking to refinance an existing mortgage, whip out a loan calculator to get the exact mortgage payment.
Some Interesting Takeaways from the Mortgage Rate Charts
The lower the interest rate, the smaller the difference in monthly payment. As rates move higher, the difference in payment becomes more substantial. Something to consider if you’re looking to pay mortgage discount points.
If you look at the 30-year mortgage rate chart, the monthly payment difference on a $500,000 loan amount between a rate of 3.5% and 3.75% is $70.36, compared to a difference of $77.93 for a rate of 5.25% vs. 5.5%.
Additionally, higher mortgage rates can be more damaging than larger loan amounts. Again using the 30-year chart, the payment on a $400,000 loan amount at 3.50% is actually cheaper than the payment on a $300,000 loan at 6%.
So you can see where an individual who purchased a home while mortgage rates were super low could actually enjoy a lower mortgage payment than someone who bought when home prices were lower.
However, for someone purchasing a really expensive home, upward interest rate movement will hurt them more than someone purchasing a cheaper home. Sure, it’s somewhat relative, but it can be a one-two punch for the individual already stretched buying the luxury home.
To illustrate, the difference between a rate of 5% and 5.25% for loan amounts of $300,000 and $900,000 is about $46 vs. $138, respectively.
Lastly, note that my mortgage payment graphs only list the principal and interest portion of the mortgage payment. You may also be subject to paying mortgage insurance and/or impounds each month. Property taxes and homeowner’s insurance are also NOT included.
You’ll probably look at this chart and say, “Hey, I can get a much bigger mortgage than I thought.” But beware, once all the other costs are factored in, your DTI ratio will probably come under attack, so tread cautiously.
I referenced this problem in another post that focused on if mortgage calculators were accurate, in which I found that housing payments are often greatly underestimated. So you might want to drop your loan amount by $100,000 if you think you can just get by, as those other costs will certainly play a role.
Oh, and if you want to nerd out a little bit (a lot), learn how mortgages are calculated using real math, not some fancy calculator that does it all for you.