Mortgage Rate Changes - Guess The Payment (Please Play Along)

August 2, 2017 | Posted by: Shayne Beeler

I’ve started asking more and more people for ideas on mortgage topics they’d like me to write on. Yesterday, it was suggested I break down how interest rate changes actually impact mortgage payments.

While trying not to pick on the media, I’m sure all of us could agree that headlines can create shock and awe… perhaps they can even make us panic at times.  So lets take a look at the mortgage payment impact using a $300,000 mortgage and without scrolling down or googling a mortgage calculator, try and guess the payment – we’ll give you the actual payment for the first one:

$300,000 mortgage / rate of 2.79% / 25-year amortization = $1387.61 per month

(why 2.79%? That’s midway between where we’ve seen fluctuations so far this year)

 Now, on a piece of paper or in your head, take a guess at the payments based on the following rates (still using a $300,000 mortgage and a 25-year amortization):


1)   Double the interest rate – 5.58%


2)   Increase the rate by 1% - 3.79%


3)   Increase the rate by ½% - 3.29%



Once you have your answers, scroll down and compare:




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Ok, please scroll just a bit more….




The actual mortgage payments:


1)   Doubling the rate to 5.58% - $1845.17/month


2)   Increasing the rate by 1% - $1544.10/month


3)   Increasing the rate by 1/2% - $1464.75/month


How did your guesses stack up? Trying this while sitting with Clients, roughly 80% estimate much higher payments.  We believe the point of this exercise, is to always make sure we’re getting the facts before letting the “sting” of the news get to us.  How many of us quickly find a mortgage calculator when we hear about increased interest rates? Some of our Clients do (you know who you are) and many don’t.  Regardless, you could always contact us to calculate and discuss the facts prior to hitting the panic button.

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