What It Really Means To Have Historically Low-Interest Rates

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Have you wondered what it really means to have historically low-interest rates?

Let’s take this example…

Let’s say we have a $200k, 30-year fully amortized, fixed-rate mortgage, which has a monthly principal and interest-only payment.

In the 1980s, the average rate interest rate was 12.7% and created a $2,166. Monthly mortgage payment.

Now in 2020, that same mortgage loan, with a 3.45% interest rate, the monthly payment is as low as $894!

That’s a difference of $1272 per month in savings!  And over $15,000 every year for the life of the loan.


Now consider that the average value of real estate appreciation across the US is anywhere from 3 to 5 % annually.

This $200k home is creating $6 to $10k in equity.  In just 5 years your $200k home could be worth $243,330, which is $43,330. more dollars than you had when you bought the home!

Granted, right now, many lenders are requiring a bit higher of a credit score to qualify, as long as you have some savings tucked away, a regular and historically verifiable income – now is such a great time to buy a home!  As you have seen, it will save a good amount of money in the long run!!