Timing your home purchase based on mortgage rates comes down to whether you want to prioritize lower monthly payme꧂nts or lower total mortgage cost. Several factors can influence whether it's better to take advantage of one or the oth⛄er, such as how long you plan to own the property and whether refinancing is possible. Generally, the best time to buy is when you're financially prepared.

The 3 Factors That Dete🦄rmine Your Monthly Pa𝓰yment

Your monthly 澳洲幸运5官方开奖结果体彩网:mortgage payment is primarily af💧fected by three things: the interest rate, the home price, and the down payment.

• The price of the home affects how large a loan you’ll likely require. The more you borrow, the bigger your monthly payment.
• The interest rate determines how much you pay in interest over the life of the loan. A higher rate means a larger monthly payment. 
• A larger down payment reduces the need for a larger loan amount, which means a lower monthly payment.

Below are a few examplജes of how these three factor💧s can alter your monthly payment:

How Much Should Your Down Payment Be?

Your down payment directly reduces the amount you need to borrow, which means you'll pay interest on a smaller balance. When interest rates are high, making a larger down payment can reduce the impact by lowering your monthly cost. When rates are loꦆw, it may make sense to pay less down and keep more cash avai𒆙lable for other financial goals.

How do you know what a good rate is? You can keep track of it on the Freddie Mac website. Fixed interest rates on 30-year mortgages climbed to 6.8% in early 2025, but Fannie Mae expects rates to 澳洲幸运5官方开奖结果体彩网:drop to 6.3% by the end of the year.

Ownership Time Frame

The amount of time you plan to stay in the home matters, especially if you're buying at a higher interest rate. To make a profit when you sell, you typically need to have lived in your home long enough to 澳洲幸运5官方开奖结果体彩网:build sufficient equity and recoup your purchase cost. This typically takes around five years. Since equity 🅺grows more slowly when you buy at a high interest rate, long-term ownership is more importan🍸t when rates are higher.

Looking at historical neighborhood appreciation trends can help you understand how quickly you can build equity. Stable or steadily rising property values are a good sign that you'll build equity faster.

HOA Fees

If you're buying in a neighborhood with a homeowners association (HOA), you'll likely have monthly, quarterly, or annualꦿ fees that cover shared areas and amenities. When interest rates are high, your mortg💞age payment eats up more of your budget, and HOA fees could put you above your ideal monthly payment. High HOA fees can also offset the benefit of getting a lower interest rate.

When shopping around for homes, ask their respective HOAs for historical fee data to see how often rates increase and whether they've gone up recently.

Refinancing Potential

If you buy at a higher interest rate, 澳洲幸运5官方开奖结果体彩网:refinancing down the line could help reduce your mortgage costs, assuming interest rates drop and you can qualify. This makes getting a cheaper home potentially more valuable than a mor🐽tgage with a low 😼interest rate.

When speaking with lenders, ask about the costs associated with refinancing. Knowing how much you might pay in advance means you can start saving for a possible refinance sooner and, when the time comes, be able to afford▨ it.

The Bottom Line

Whether you prioritize low interest rates or low home prices depends on your financial goals, timeline, and budget. If you're focused on a lower monthly payment, waiting for rates to drop may be worth it. On the other hand, if you want to maximize equity growth, taking advantage of low home prices could be a better move. Either approach can be smart; it all comes down to what works best for your situation.