Mortgage rates have hit their highest levels in a decade, adding thousands in costs for homebuyers. The average interest rate on a 30-year fixed-rate mortgage rose to 6.7 percent as of March 9, up from an average of 3 percent in December 2021, according to Freddie Mac.
[See how many all-cash buyers snagged houses in your neighborhood]
Below you can see how this jump affects the monthly cost of a typical mortgage. If you already have a mortgage, add up your existing interest rate to see how much it would cost if you signed up today.
How much is a mortgage at 6.7% interest?
Monthly principal and interest payments
with 3% interest$0
with 6.7% interest$0
Monthly differenceThe difference$0
Warning: Calculations are based on a fixed 30-year mortgage. Calculations ignore mortgage insurance, closing costs, HOA fees, property taxes and other fees.
While the principal—the amount of debt that must be repaid—remains the same, changes in interest payments can be huge. Over a 30-year mortgage, the extra interest can add up to hundreds of thousands of dollars.
Total payments on a 30-year mortgage
After 20% down on a $450K home
$360 thousand
main
$360 thousand
main
6.7 percent only a 30-year average. The exact rate a home buyer receives depends on other factors such as income, debt, credit history and down payment amount.
To suppress inflation, the Federal Reserve raised interest rates. That makes buying a home even more expensive in a market where home values ​​have skyrocketed during the pandemic.
Illustration author Alyssa Powers.
