Here’s how the latest interest rate hike affects monthly mortgage payments

JACKSONVILLE, Florida. – For the first time in more than a decade, mortgage rates have jumped above 5%, and with the highest inflation in 40 years, home ownership is more expensive than ever.

News4JAX shows you how this latest interest rate hike affects monthly mortgage payments.

Americans who haven’t bought a home during the COVID-19 pandemic may be suffering sticker shock when looking for financing today.

This latest hike follows the Federal Reserve’s announcement last week that it intends to raise interest rates at a faster rate – as a way to fight inflation on everything from groceries to cars, including gasoline.

News4JAX analyzed the numbers for a $250,000 home loan, excluding taxes, insurance and fees, and found that a year ago today, the average 30-year fixed interest rate was 3, 04%, which was equivalent to a mortgage payment of $1,059 per month. That same $250,000 home loan at the current interest rate of 5% is equivalent to a payment of $1,342. That’s $283 more per month, or $3,386 more per year.

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Economists say rising interest rates could boost home sales in the coming weeks as house hunters scramble to buy a home for fear mortgage rates will rise again.

Federal officials hope higher interest rates will help reduce inflation, while homes remain scarce.

In March, Jacksonville home prices rose 25.5% from a year ago, selling for a median price of $295,000, according to Redfin.

What remains uncertain is whether or not the Fed will raise interest rates again.

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