Higher Rates Bring Modest Rise in Chicago Mortgage Payments

by Peter Thomas Ricci

We all know that higher interest rates lead to larger mortgage payments, but the impacts differ substantially across the nation’s metro areas.

It’s one of the essential truisms in real estate – higher mortgage rates equal higher monthly payments for consumers.

And with expectations high that the Federal Reserve will increase interest rates in the coming months, agents and prospective buyers alike are prepping for a new housing market, one without “historically low rates” as its lynchpin.

Of course, monthly mortgage payments ultimately derive from the cost of the mortgage, and given the stupefying variety of home values in the U.S., it makes sense that some consumers will be affected more than others by an increase in rates.

To get an idea of how a rate increase would play out, we put together the infographic below, which uses recent Zillow analysis on how monthly mortgage payments would increase in the event of a 1 percentage point rise in the 30-year FRM (from 4.1 to 5.1 percent).

What’s the end result? Check out the graphic to find out:

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