In the last couple of weeks, the mortgage industry has seen interest rates bottom out and start to move back up.  Most analysts believe that we have tested the lows and now the Fed wants to get inflation back to its target of 2% and to do so, it will start raising interest rates.

Even so, you can still get great interest rates.  It is still possible to get your rate in the 4% but if you don’t act soon, you may miss that window.

Let’s look at some examples of what the principle and interest payment on a $200K mortgage would be over a range of interest rates:

Interest Rate                   Monthly Payment

4.50%                                  $1013.37

4.75%                                  $1043.29

5.00%                                  $1073.64

5.25%                                  $1104.41

5.50%                                  $1135.58

5.75%                                  $1167.15

6.00%                                  $1199.10

Now someone could look at this and think, “The difference between 6.00% and 5.00% is only ~$126/month; That is not worth the cost of refinance.”  But you have to remember that this is just comparing different rates for the same loan amount.  If a borrower had an original loan amount of $215K at 6.00% and has had this mortgage for 5 years, their payment savings would like more like this:

Original Payment at 6.00% = $1289.03

New Loan Amount $205K

Interest Rate      New Payment       Monthly Savings

4.50%                  $1038.70                 $250.33

4.75%                  $1069.38                 $219.65

5.00%                  $1100.48                 $188.55

Now I know that the odds of this being your example situation are pretty slim but this example is designed to show you that even though we have seen the bottom of interest rates, rates are still good and can save you thousands of dollars in interest.  But you do not want to wait long.