If you’re planning to buy a home, there’s one factor that can significantly impact your monthly payment: interest rates.
Let’s break down what that really means, using simple examples so you can better understand how it all adds up—and how small changes can make a big difference to your bottom line.

The Power of 1%: What a Rate Change Can Do
Let’s say you’re planning to purchase a home for $600,000.
- At an interest rate of 6.1%, your estimated monthly payment would be around $3,800.
- Bump that interest rate up to 7.1%, and the monthly payment climbs to approximately $4,100.
That’s a $300 monthly increase—just from a 1% difference in the rate!
Over a year, that adds up to $3,600, and over a 30-year mortgage, that’s more than $100,000 in additional payments.
Competition Can Cost You, Too
It’s not just interest rates that can increase your monthly costs—competition from other buyers can also drive up home prices.
For example:
- For every additional $10,000 you add to your purchase price,
- You can expect to pay roughly $70 more per month.
This means if you get caught in a bidding war and end up offering $20,000 more, that’s an additional $140 per month—and potentially tens of thousands more over the life of your loan.

Why This Matters
Even a small increase in your interest rate or home price can have a major effect on your monthly mortgage. That’s why it’s so important to:
- Understand your budget clearly
- Get pre-approved early
- Work with a knowledgeable real estate team who can guide you through competitive markets
Let’s Talk Strategy
At Lucas Howard Group, we’re here to walk you through every step of the process from understanding rates to negotiating the right deal. If you have questions about how interest rates or home prices affect your payments, reach out to us today.
Whether you’re just starting your home search or you’re ready to make an offer, we’ll help you plan smart and move forward with confidence. Call us, we’re here to help.