Tim & Julie Harris
Real Estate
The True Cost of Waiting for Lower Rates
Buyers wait for rates to drop ? but while they wait, prices keep climbing. See what actually happens to the monthly payment, and how a rate buydown (which a seller can pay for) changes the math.
Appreciation benchmarks (nominal): long-run U.S. average ? 4.3%/yr (FHFA, since 1975); the last decade has run closer to 7%/yr. Every input below is fully adjustable ? drag the appreciation slider to match your own market.
Your assumptions
Same percent down in both scenarios.
The lower rate you're hoping for.
Historical U.S. average is ~4?5%/yr.
Paid to a landlord ? builds no equity.
Applied to the ?buy now? rate. ~1 point of cost per 0.25% (each point = 1% of the loan).
Buy now
principal & interest / mo
Purchase price
Loan amount
Down payment
Wait 18 months
principal & interest / mo
Purchase price
Loan amount
Down payment
Buy the rate down instead of waiting
New payment (bought down)
Monthly savings vs. buy-now
Cost to buy down the rate
Break-even (if buyer pays)
Monthly payment comparison
Extra you'd pay per month by waiting
Bigger down payment you'll need
Rent paid while waiting
Appreciation you don't capture
Estimated total cost of waiting
Estimates only. Principal & interest shown; excludes taxes, insurance, PMI, and closing costs. Buydown cost is a rule-of-thumb estimate ? actual point pricing varies by lender. Not financial advice.
