Mortgage rates rose dramatically in 2022, with the average rate on a 30-year, fixed mortgage doubling between January and December. Rates haven’t grown nearly as much this year, hovering between 6% and 7% — that said, they’re still considerably higher than at this time last year.
While it’s common knowledge that higher mortgage rates make monthly payments more expensive, it can be difficult to picture how much a higher rate can impact payments on a loan. With that in mind, LendingTree used data collected from users of our online mortgage marketplace to put a dollar amount on how rising rates could affect the cost of a mortgage. Here's what we found.
- 30-year, fixed-rate mortgage APRs increased by an average of 1.85 percentage points across all 50 states between April 2022 and April 2023.
- Nationwide, rising APRs caused calculated mortgage payments to increase by an average of $121.09 a month. To put that figure into perspective, that monthly increase amounts to an average of $1,453.10 in extra costs each year and an average of $43,593.12 in additional costs over the lifetime of a 30-year loan.
- Calculated mortgage payments increased the least in North Dakota, Iowa and Wisconsin.
- Hawaii, New York and California saw mortgage payments increase the most.
You can check out our full report here: https://www.lendingtree.com/home/mortgage/rising-mortgage-rates-study/
LendingTree's Senior Economist and report author, Jacob Channel, had this to say:
"Fortunately, mortgage rates have stopped climbing so dramatically over recent months. While rates have fluctuated up and down on a week-to-week basis over the last several months, they haven’t experienced the same consistent gains that they did last year. This trend could continue over the coming months as the Fed appears likely to have halted hikes to its target Federal Funds Rate for the time being, and as inflation continues to come down.”