Bank Loan Interest Rates for Home Loans

Hello Hampton Roads,

Let's talk about bank loan interest rates for home loans!  Interest rates are at historic lows and according to Bankrate.com , rates currently sit at 4.50% for a 30 year fixed mortgage.  Rates this low provide us with the ability to buy more house with the same income—it's almost like getting a raise if you are in the home buying market!

Here is a quick example:

Lets compare today's rate of 4.50% for a 30 fixed loan, with that of a 6.5% rate (a rate which many of us were more than happy to have—maybe some of you remember the 10% plus rates a few decades ago!) for a $176,900 mortgage.  The $176,900.00 amount  is used because it is the national median sales priced home in the U.S.

At 6.5%, your monthly mortgage payment of principal and interest (not including taxes and insurance) would be $1,018.13.

At 4.5%, your payment would be $896.33! That is a difference of $121.80 a month or $1,461.60 a year! Or put another way if you can afford a payment of $1018.13 for principal and interest this is like buying a home priced at about $200,000.00.

Who would have thought that the biggest housing crash in history would coincide with the lowest interest rates for home loans? 

If you need to buy a home now may be the perfect time to do so and get the biggest bang for your buck!   It may be time to consider buying a new home while these low interest rates allow you to buy more house than perhaps you thought possible.  However, don't buy to speculate on housing prices hitting a meteoric rise like they did prior to the housing bubble. Prices are likely to remain flat in the near future.


Thanks for Reading,



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Serving your Hampton Roads and Virginia Beach Real Estate needs.

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