You've probably heard that interest rates are up, down, or about to change. But what does that actually mean for your mortgage payment? In our latest YouTube video, we break it all down with examples, but here’s a quick guide to help you understand how rates truly affect your buying power — and why this knowledge is crucial whether you're buying your first home or your next investment.

What Is an Interest Rate, Really?

In simple terms, your interest rate is the cost of borrowing money. It determines how much you pay your lender in addition to repaying the loan itself.

Even a small change in the rate can make a big difference in your monthly payment — and over the life of your loan.

How Rate Changes Impact Your Monthly Payment

Here’s an example:

Let’s say you’re borrowing $300,000 over 30 years:

• At 4% interest: ~$1,432/month (principal & interest)

• At 6% interest: ~$1,799/month

That’s a $367/month difference… just based on the interest rate.

Now imagine the impact over the full 30 years. That’s over $130,000 more in total payments.

What Should Buyers Focus On?

1. Affordability, not just price: Focus on the monthly payment that fits your lifestyle, not just the list price of the home.

2. Rate shopping: Lenders may offer different rates based on credit, loan programs, and more. Always compare.

3. Lock it in wisely: Rates can change daily. Once you find a good one, talk to your lender about locking it in.

What About Sellers?

If you're selling, you might notice buyers are more payment-conscious than price-conscious right now. Understanding how interest rates influence buyer behavior helps you:

• Price competitively

• Offer creative financing incentives (like rate buydowns)

• Adjust timelines and expectations

Final Thoughts:

Interest rates are more than a headline — they shape the entire real estate conversation. Whether you're buying or selling, understanding how they impact the bottom line gives you the power to make smart, confident decisions.