{"id":96497,"date":"2024-12-06T10:00:02","date_gmt":"2024-12-06T18:00:02","guid":{"rendered":"https:\/\/www.redfin.com\/blog\/?p=96497"},"modified":"2024-12-06T12:31:46","modified_gmt":"2024-12-06T20:31:46","slug":"how-much-does-interest-rate-affect-monthly-payment","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/blog\/how-much-does-interest-rate-affect-monthly-payment\/","title":{"rendered":"How Much Does Interest Rate Affect Monthly Payment? You Asked, We Answered."},"content":{"rendered":"

For those looking to move from an <\/span>apartment in Glendale, California<\/span><\/a> to a <\/span>home in Sherman Oaks<\/span><\/a> or outside the state, mortgage interest rates are a crucial factor to consider. These rates directly impact the monthly payments you’ll make on your loan. How much does interest rate affect monthly payment? You might be asking, especially now that interest rates have finally decreased. We\u2019ll answer that and more here.\u00a0<\/span><\/p>\n

Understanding <\/span>how interest rates work<\/span><\/a> and how they can affect your finances is essential for making informed decisions about homeownership. In this Redfin article, we’ll explore the basics of mortgage interest rates, how they influence your monthly payments and strategies for managing them. Now, let\u2019s get started.<\/span><\/p>\n

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1. Understanding interest rates<\/span><\/h2>\n

First, let\u2019s talk about what interest rates are and how they work.<\/span><\/p>\n

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Mortgage interest vs principal<\/span><\/h3>\n

When you take out a mortgage, you borrow money from a lender to purchase a home. In return, you agree to repay the loan over a set period, plus interest. The principal is the original amount you borrowed, while the interest is the additional cost you’ll pay for using the lender’s money.<\/span><\/p>\n

Fixed-rate mortgage vs adjustable-rate mortgage<\/span><\/h3>\n

There are two main types of mortgage interest rates: fixed-rate and adjustable-rate.<\/span><\/p>\n