If you bought your home with a mortgage of $250,000 and a 6% interest rate, you are currently paying (only on principle) $1500.00 a month.
Today at an interest rate of 3.875% that same $250,000 loan would cost you $968.75 a month. That’s a big difference.
To calcualte how much more you could get, you want to subtract $968.75 from $1500.00 to get $531.25. If you are paying interest per $1,000 borrowed you would then want to divide that amount by the current rate of 3.875% to get 137.
The number you are now going to work with is 137. What does that mean? That means for the same $1500.00 a month you can get $137,000 more house. So what does that mean?
For many people it means a chance to save some money on your home via a refinance. For others it is a chance to “steal a deal” and move up.