Moving to Lamorinda: Lower Price or Lower Interest Rate?
Updated: Jan 4
Which is Better?
Should you wait for lower prices or lower interest rates before you jump in? Consider the following:
The price of a home is fixed but interest rates can change. Do you know that prices have to drop significantly (which is unlikely in Lamorinda California with the current low interest rate) to equal a minor fluctuation in mortgage interest rates?
A quick visit to a mortgage calculator will show you the following:
Comparing interest rate
• If you buy a home at $1,000,000 in Lamorinda California with a 30-year, fixed-rate mortgage at 4%, your monthly payment will be approximately $5,153 and you'll pay $574,943 in interest over the life of the loan.
• The same home at 3.5% interest costs $4,926, a difference of $227 more per month and $493,237 in interest over the life of the loan. The difference in interest payments alone is $81,706.
• If the home dropped 0.5% in value and you were able to buy it at $995,000 at 4% interest, your monthly payment would be $5,127, with $572,067 in interest over the life of the loan. You'd save $26 per month than if you'd paid $1,000,000.
Mortgage interest rates today are at all-time lows. Get in touch today to start your home buying process. Don't miss the opportunity to call Lamorinda, California your new home.
Wondering what your current home is worth? Visit our website to get an instant analysis of your home value in California.