Below are some of my notes from the dialogue of the video to outline the impact interest rates play:
I just wanted to take a second to talk about interest rates
Year over year we are up by 0.71%
Compared to 2016, we are up just over 1 full percent.
Doesn’t sound like a lot, but lets break it down.
If you bought a house and financed:
$300,000 @ 3.6% interest
Monthly payments are around $1,364
Total interest paid over the life of a 30 year loan is $191,016.14
If you bought the same house right now
$300,000 financed at 4.62% interest
Monthly payments are $1,541 – that is $176 per month more NOW
Total interest paid over the life of a 30 year loan is $254,947.76
That is $63,931.62 higher than in 2016
Let’s say the interest rates jump to 7%
Same house
$300,000 @ 7%
Monthly payments of $1,996
Total interest of $419k
So, you’re payments on the financed portion would be 30% higher
And you’d pay 64% more interest