I just received this chart from a mortgage specialist and thought it was worth sharing. The objective is to show people that with interest rates being at an all-time low the opportunity to buy a home is presenting itself to individuals and families that may not have had the chance previously. Or perhaps you were thinking about buying an income property and previously couldn’t afford the monthly mortgage due to higher rates. I currently have an income property. This property is a duplex and is great when both units are rented. At the moment one of these units is empty and there are not the same number of individuals looking to rent…..likely due to the low interest rates available. At the very low interest rates this income property is great….the problem arises when interest rates increase and the roof needs to be replaced and the washer and dryer stop working etc. etc. etc. More and more I am feeling that the landlord world is not for me!
Check out the table below if you are considering buying vs renting. Understand that there are many hidden costs to becoming a home owner that you do not have to deal with while renting.
Example One – $100,000 Mortgage
At 4% the P&I payment is $526.03
At 5% the P&I payment is $581.61
At 6% the P&I payment is $639.81
Example Two – $150,000 Mortgage
At 4% the P&I payment is $789.04
At 5% the P&I payment is $872.41
At 6% the P&I payment is $959.71
Example Three – $200,000 Mortgage
At 4% the P&I payment is $1052.05
At 5% the P&I payment is $1163.21
At 6% the P&I payment is $1279.62