I wasn’t a Realtor when interest rates were in double digits and we’re a long way from that now but rates do matter.  In January of 2010 a 30 year mortgage was quoted at 4.75% for a qualified buyer.  In November, it was 4.25% and today is back to 4.75% (note that these are base rates and do not include points or fees).

That .5% equates to $29 a month for every $100,000 borrowed or $348 per year.  The median price of a Portland home in 2010 was $240,000 according to December’s RMLS Market Action.  The purchase with 20% down (borrowing $200k) the payment goes up $60 from $1013 to $1063.  If you don’t have a use for $720 a year, send it this way.

We heard a lot a few years ago about “historic low interest rates” and then they got even lower last year.  A half point isn’t a huge change but note that a $400,000 loan at 4% has a about the same monthly payment as a $300,000 loan at 6.5%.