Rate × Principal
A higher rate means more of each payment goes to interest instead of principal. At 5.5%, about 57% of your first payment is interest. At 7%, it's about 65%.
See exactly how mortgage rate changes affect your monthly payment and total interest paid. Compare two rates side-by-side to understand the true cost of a rate increase on your home loan.
See exactly how rate changes translate to monthly and total payment differences.
Mortgage rates directly determine your monthly payment and total interest paid over the life of a loan. Even a small rate increase — like going from 5.5% to 7.0% — can add hundreds of dollars to your monthly payment and tens of thousands over the loan's lifetime.
On a $350,000 mortgage, a 1.5% rate increase raises your monthly payment by about $340 — that's over $4,000 more per year and roughly $122,000 more in total interest over 30 years.
Understanding rate impact helps you decide when to lock a rate, whether to buy now or wait, and how much home you can truly afford. This calculator lets you compare any two rates side-by-side instantly.
A higher rate means more of each payment goes to interest instead of principal. At 5.5%, about 57% of your first payment is interest. At 7%, it's about 65%.
A 15-year mortgage has higher monthly payments but dramatically less total interest. At 7%, you'd pay $488K interest on a 30-year vs $201K on a 15-year loan.
Rate increases reduce your buying power. At 5.5%, you could afford a $350K home on a $2,000/mo budget. At 7%, the same budget only covers ~$300K.
The Fed's interest rate decisions directly influence mortgage rates. When the Fed raises rates to fight inflation, mortgage rates typically follow.
Higher credit scores qualify for lower rates. The difference between a 680 and 780 score can mean 0.5-1.0% lower rate, saving tens of thousands.
Larger down payments (20%+) typically unlock better rates and avoid PMI. Less skin in the game means higher perceived risk for lenders.
Inflation, employment data, and bond market performance all affect mortgage rates. Strong economic indicators often push rates higher.
Fixed vs ARM, conventional vs FHA/VA — each loan type has different rate structures. ARMs start lower but can adjust significantly over time.
Paying "points" upfront can lower your rate. One point (1% of loan) typically reduces the rate by 0.25%. The math works out if you keep the loan long enough.
Click any example to load it into the calculator.
$300K loan: 6.0% → 7.0%
$500K loan: 5.0% → 7.5%
$250K loan: refinance from 6.5% to 5.5%
$400K at 6%: compare 15-year term
On a $300,000 30-year mortgage, each 1% rate increase adds roughly $175-$200 per month to your payment. Over 30 years, that's about $65,000-$72,000 in additional interest paid.
Nobody can perfectly predict rate movements. If current rates fit your budget and financial goals, locking protects you from increases. Rate locks typically last 30-60 days. Consider your risk tolerance and market conditions.
The general rule: refinance when you can drop your rate by at least 0.75-1.0% and plan to stay in the home long enough to recoup closing costs (typically 2-4 years). Use this calculator to compare your scenarios.
Fixed rates provide payment certainty for the entire term. ARMs start lower but can adjust significantly. ARMs make sense if you plan to sell within 5-7 years. Fixed rates are safer for long-term homeowners.
A 15-year mortgage saves massive amounts in total interest but comes with higher monthly payments. If you can afford the higher payment, a 15-year term often saves 50-60% in total interest compared to a 30-year term at the same rate.
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