By now many of us know that yesterday the interest rates were raised. Banks have already anticipated this raise in a lot of cases and raised their 30-year rates a short time ago. Rates on adjustable mortgages will be the most sensitive to yesterday's action by the Federal Reserve. Depending on your credit score and other loan factors such as your debt ratios, your loan rate will vary, but generally it's around 6% for a 30-year fixed. In 2001, that same rate was at 7%, and some analysts are projecting we will again be close to that rate by the end of the year.
So if you have a mortgage of $180,000, let's say, take a look at the difference between getting a 6% rate now and a 7% rate in the future:
6%, your monthly P&I payment is $1079.19; at 7% it's $1197.54. See the difference? This chart shows key interest rate moves since 2001. A 30-year fixed is not your only loan option, for example, on an interest-only loan, that $1197 would be reduced to $1050.
To put things in a 10-year perspective, view this chart.
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