Interest rates are expected to rise, but how much?
Today I want to take a minute to talk about interest rate predictions.
Jamie Dimon, the CEO of JPMorgan Chase, predicts that the yield on the 10-year Treasury bond will go up 5% in the next 24 to 36 months. Typically the spread between the 10-year Treasury bond and a 30-year mortgage is about a 1.75% yield. The yield as of August 7 for a 30-year mortgage is 4.75% with a spread of 1.77%. If the yield goes to 5% then the 30-year mortgage rates rise to 6.75%
This means is that if you purchase a home for $290,000 with a 5% down payment, your payment would be $1,437 per month. If the interest rate jumps to 6.75% for that same loan, though, the payment would be $1,786 per month. This $349 more interest per month becomes nearly $4,200 per year more and $125,000 over the life of the loan.
“Now is your chance to get into the marketplace.”
In other words, now is your chance to get into the marketplace. Of course, if you have any questions that I can answer about this or buying and selling in general, please feel free to reach out to me. I look forward to speaking with you soon.
This communication is provided to you for informational purposes only and should not be relied upon by you. Nate Martinez nor RE/MAX Professionals are not mortgage lenders and so you should contact a qualified mortgage broker directly to learn more about its mortgage products and your eligibility for such products.
