Interest rates on mortgage loans are rising rapidly in the United States. As the Federal Reserve pursues an aggressive strategy of rate hikes to curb inflation, homebuyers are increasingly saddled with higher borrowing costs.
The national average 30-year fixed mortgage rate is now approaching 6%, up from just 3.79% in January. The rate increase could mean tens of thousands of dollars more in interest payments for new homebuyers this year.
A recent report published by loan platform LendingTree reviewed home sale and mortgage data to quantify the effect rising mortgage rates could have on homebuyers.
In Minnesota, the average APR – annual percentage rate – on a mortgage rose from 3.77% in January to 5.22% in April. This increase means that a homebuyer who took out a mortgage in April will pay about $244 more per month in interest than one who took out a mortgage in January, based on the average mortgage amount of $283,885 across Minnesota.
Accounting for both average home values and mortgage rates, the increase in interest rates from January to April for the typical homebuyer in Minnesota will add up to $2,931 more in the first year alone and $87,938 over the lifetime of the 30-year mortgage – the 21st smallest increase among states.
All data in this story is from the report Rising Mortgage Rates Could Cost Some Homebuyers More Than $100,000 Over Lifetime of Loans from LendingTree.
|Rank||State||Extra amount paid over 30-year lifetime of mortgage ($)||Average APR, January 2022 (%)||Average APR, April 2022 (%)||Average mortgage amount, 2022 ($)|