Interest Rates

After deciding which type of loan is right for you, figure out what an affordable monthly mortgage payment will be. Your payments reflect both the interest and principal of your loan, which in turn affects the loan amount you can obtain. If you have a high interest rate, you might consider taking out a smaller loan. Smaller loans translate into fewer purchasing options, but also mean smaller monthly payments. 

How does interest affect your monthly payments? View one of the following charts to see how your mortgage payment is affected by interest rates. To view the 15-year and 30-year fixed-rate tables, download the attachments.

To use the tables, find the interest rate for your mortgage at the top, then skim down that column until you find a payment (includes interest and principal) that you can manage. Moving left across the row will give you the loan amount for which you need to qualify. 

Payments do not include private mortgage insurance, property taxes or homeowner’s (hazard) insurance. Including these expenses in your monthly mortgage payment will increase your monthly payments by hundreds of dollars each month.

TIP: To get an idea of how a mortgage will amortize, access The Mortgage Rate Directory.

TIP: Fannie Mae changes it loans limits each year.  Click here to find out current loan limits.