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What is the monthly mortgage price difference for a loan interest rate of 4% vs 3.75% vs 3,5%?

I am looking for a mortgage for a loan amount of $258,000, after putting 20% down. My husband and I have great credit scores (mine >760, my husbands >800). A mortgage broker through my realtor is quoting me at 4% fixed with no points. Is there any way of getting a better rate, and how much of a difference will it really make??
  • January 11 2012 - Pittsburgh
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Answers (4)

Profile picture for BlairCohen

Julie,

Rates may change daily and the trend is up slightly at this time.  (How much lower could they really go?)  I just got a quote for a client of 3.875% for 30 years and 3.25% for 15 years for the type of loan that you are asking about.

It depends not only on how much the interest rate is and on the amount you borrow but the the number of years the loan is amortized for.

Here is the approximate cost per $1,000.00 you borrow.

4.00%     for  30 years  $4.77  for   15 years $7.40

3.875%   for 30 years   $4.70  for   15 years $7.33

3.75%     for  30 years  $4.63  for   15 years $7.27

3.50%     for  30 years  $4.49  for   15 years $7.15

3.25%     for  30 years  $4.35  for  15 years  $7.03


So if you borrow $258,,000 at 3.875 % for 30 years then 258 X 4.70 = $1,212.60 (approximately)

This of course would be plus real estate taxes, hazard/home owners insurance, private mortgage insurance (if any) and home owners association/condo fees (if any)

I hope this is helpful.
Blair

  • January 11 2012
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Difference.....about $19 per month for each 1/8% lower rate on your $258K loan balance. After tax benefit about $15 montly.  Only you can evaluate risk vs reward.
  • January 11 2012
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Julie..To start you should be at 3.875% with no points here in PA.  Getting down to 3.5% would probably cost a couple of points and depending on the time frame you feel you will be in the home might not be worth it.  Plus if the seller is not paying for any closing costs, you will find that closing in PA is not cheap and you may want to hold onto your cash for all of the other things that come with moving.  Happy to answer any additional questions.  Just contact me through my profile.
  • January 11 2012
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258,000 4%=$1,231.73
258,000 3.75%=$1,194.84
258,000 3.5%=$1,158.54
  • January 11 2012
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