People have children and need to get a bigger place. Or their children grow up and move out, so they downsize.
Yes, higher rates will increase your payment even if the principal is lower.
A $300K 30 year mortgage (paying 20% down) at 3.25% costs $1044 per month. The same mortgage at 6.25% costs $1477 per month. 15% is $3034 per month. At 15% you can afford half as much house as at 6.25%, and a third as much as 3.25%
Also, you will get less equity for your house when you sell because other people can’t afford a larger loan (because their payments go up too). That’s the purpose of high interest rates; they prevent people from borrowing money.
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You don’t understand. With high interest rates, no one wants to move because their home mortgage will be higher even on a smaller place.
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I just explained it to you:
Yes, higher rates will increase your payment even if the principal is lower.
A $300K 30 year mortgage (paying 20% down) at 3.25% costs $1044 per month. The same mortgage at 6.25% costs $1477 per month. 15% is $3034 per month. At 15% you can afford half as much house as at 6.25%, and a third as much as 3.25%
https://www.bankrate.com/mortgages/mortgage-calculator/
Also, you will get less equity for your house when you sell because other people can’t afford a larger loan (because their payments go up too). That’s the purpose of high interest rates; they prevent people from borrowing money.