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How much will a $600,000 mortgage cost monthly after rates are cut?

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White paper houses with red arrow down on wall background. Concept for low cost real estate.
Waiting for rates to drop could mean getting a more affordable mortgage loan payment — but there are risks to that strategy.

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The housing market landscape has been challenging for buyers to navigate over the past few years. After all, a perfect storm of high mortgage rates, limited home inventory and elevated home prices has created significant barriers to entry for those looking to purchase a home. With homebuying costs elevated, many potential buyers have been temporarily priced out of the market, leaving them wondering when, if ever, they might be able to achieve their dream of homeownership.

But while the housing market hasn’t been friendly to buyers recently, there are signs that the tide may be turning. In particular, there are economic indicators suggesting relief from high rates could be on the horizon. Not only has inflation cooled to just above the Federal Reserve’s 2% target rate, but the job market is slowing down, too. In response to these developments, the Federal Reserve is finally expected to start implementing rate cuts, with the first one expected at the upcoming Fed meeting that concludes on September 18.

These economic shifts also make it more likely that the Fed will implement more rate cuts in the coming months. Such a move would likely have a significant impact on mortgage rates, potentially opening up new opportunities for homebuyers who have been sidelined by high borrowing costs. With this in mind, it’s helpful to understand how the upcoming rate cuts could affect the cost of a typical mortgage loan, such as one for $600,000.

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How much will a $600,000 mortgage cost monthly after rates are cut?

To understand the potential impact of rate cuts on mortgage costs, let’s first look at what a $600,000 mortgage would cost at today’s average mortgage rates, which are 6.41% for 30-year fixed mortgage loans and 5.78% for 15-year fixed mortgage loans (as of September 13, 2024).

These figures represent the monthly payments for principal and interest only, assuming a 20% down payment (of $120,000) has been made. It’s important to note that actual monthly payments would be higher when factoring in property taxes and homeowners insurance, which vary by location and other factors.

  • 15-year mortgage at 5.78%: $3,993.68 per month
  • 30-year mortgage at 6.41%: $3,005.57 per month

If the Federal Reserve implements a 0.25% rate cut at its upcoming meeting, and assuming mortgage rates follow suit and drop by the same 25 basis points (though there isn’t always a direct correlation), here’s how the monthly payments might change:

  • 15-year mortgage at 5.53%: $3,929.65 per month
  • 30-year mortgage at 6.16%: $2,927.40 per month

In this scenario, borrowers could save approximately $64 per month on a 15-year mortgage or about $78 per month on a 30-year mortgage. 

If the Fed were to implement multiple rate cuts totaling 0.50% over the coming months, and mortgage rates were to fall by same 50 basis points, the potential savings become even more substantial:

  • 15-year mortgage at 5.28%: $3,866.19 per month
  • 30-year mortgage at 5.91%: $2,850.13 per month

With a half-point reduction in rates, borrowers could see monthly savings of about $132 on a 15-year mortgage or about $155 on a 30-year mortgage compared to current rates.

It’s worth noting that these calculations are based on the assumption that mortgage rates will move in tandem with Fed rate cuts. In reality, the relationship between Fed rates and mortgage rates is more complex, and other factors can influence mortgage rates as well.

Find out how affordable the right mortgage loan could be now.

Should you wait for rates to drop to buy a home?

The prospect of lower mortgage rates can be appealing, but the decision to wait for rates to drop before buying a home isn’t always straightforward. There are several factors to consider, including:

  • Monthly payments: If you’re currently stretching your budget to afford a home at today’s mortgage rates, waiting for a rate cut could make homeownership more affordable and sustainable for you in the long run.
  • Buying power: Lower rates mean you might be able to afford a more expensive home while keeping your monthly payments the same, potentially opening up more options in your desired neighborhoods.
  • Competition: Lower rates typically bring more buyers to the market. This increased demand could lead to more competition for available homes, potentially resulting in bidding wars.
  • Home price appreciation: As more buyers enter the market due to lower rates, home prices could rise. The money you save on interest might be offset by having to pay a higher purchase price for your desired home.
  • Timing: While rate cuts are expected, their exact timing and magnitude are not guaranteed. Waiting for the perfect rate could mean missing out on good opportunities in the meantime.
  • Opportunity cost: If you’re currently renting, every month you wait is another month of paying rent instead of building equity in a home.

The bottom line

Waiting until rates drop to buy a home could lead to savings of between $64 and $155 per month on a $600,000 mortgage (depending on the loan term and other factors). While the monthly savings can add up over time, the decision to buy now or wait for lower rates depends on your circumstances. If you find a home and can comfortably afford the payments at current rates, it might make sense to move forward rather than risk losing the opportunity. On the other hand, if a small reduction in rates would make a significant difference in your ability to afford a home, waiting could be the prudent choice.



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After Tyre Nichols’ fatal beating, Memphis officer texted photo of bloodied man to ex-girlfriend, she testifies

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A former Memphis police officer charged in the fatal beating of Tyre Nichols sent his ex-girlfriend a photo of the badly injured man on the night he was punched, kicked and hit with a police baton following a traffic stop, according to trial testimony Wednesday.

Brittany Leake, a Memphis officer and Demetrius Haley’s former girlfriend, testified during the criminal trial that she was on the phone with Haley when officers pulled Nichols over for a traffic stop. She said she heard a “commotion,” including verbal orders for someone to give officers his hands.

The call ended, but Haley later texted the photo in a group chat comprising Haley, Leake and her godsister, she testified. Prosecutors displayed the photo for the jury. It showed Nichols with his eyes closed, on the ground with what appeared to be blood near his mouth and his hands behind his back.

Leake said that when she saw the photo, her reaction was: “Oh my God, he definitely needs to go to the Med.”

The Med is shorthand for Memphis’ trauma hospital.

The fatal beating, caught on police bodycams and street surveillance cameras, has sparked protests and calls for police reform. Officers said they pulled over Nichols for reckless driving, but Memphis’ police chief said there was no evidence to substantiate that claim.

Haley, Tadarrius Bean and Justin Smith are on trial after pleading not guilty to charges that they deprived Nichols of his civil rights through excessive force and failure to intervene, and obstructed justice through witness tampering. Their trial began Sept. 9 and is expected to run three to four weeks. 

Tyre Nichols
Former Memphis police officer Demetrius Haley arrives at the federal courthouse for the second day of jury selection for the trial in the Tyre Nichols case Tuesday, Sept. 10, 2024, in Memphis, Tenn.

George Walker IV / AP


The Memphis Police Department fired the three men, along with Emmitt Martin III and Desmond Mills Jr., after Nichols’ death. The beating was caught on police video, which was released publicly. The officers were later indicted on the federal charges. Martin and Mills have taken plea deals.

During her testimony Wednesday, Leake said she deleted the photo after she saw it and that sending such a photo is against police policy.

“I wasn’t offended, but it was difficult to look at,” she said.

Leake said Haley had sent her photos before of drugs, and of a person who had been injured in a car accident.

Earlier Wednesday, Martin was on the witness stand for a third day. Defense attorneys tried to show inconsistencies between Martin’s statements to investigators and his court testimony. Martin acknowledged lying about what happened to Memphis Police Department internal investigators, to try to cover up and “justify what I did.”

But Martin said he told the truth to FBI investigators after he pleaded guilty in August, including statements about feeling pressure on his duty belt where his gun was located during the traffic stop, but not being able to see if Nichols was trying to get his gun. Martin has testified that he said “let go of my gun” during the traffic stop.

Martin Zummach, the attorney for Justin Smith, asked Martin if he knew of any reasons why Nichols did not simply say, “I give up.”

“He’s out of it,” Martin said. “Disoriented.”

Martin testified that the situation escalated quickly when Haley pulled his gun and violently yanked Nichols from his car, using expletives and failing to tell Nichols why he had been pulled over and removed from the vehicle.

“He never got a chance to comply,” Martin said.

Nichols, who was Black, was pepper sprayed and hit with a stun gun during the traffic stop, but ran away, police video shows. The five officers, who also are Black, then beat him about a block from his home, as he called out for his mother.

Video shows the officers milling about and talking as Nichols struggled with his injuries. Nichols died Jan. 10, 2023, three days after the beating.

An autopsy report shows Nichols – the father of a boy who is now 7 – died from blows to the head. The report describes brain injuries, and cuts and bruises on his head and elsewhere on his body.

Jesse Guy testified that he was working as a paramedic for the Memphis Fire Department the night of the beating. He arrived at the location after two emergency medical technicians, Robert Long and JaMichael Sandridge.

Guy said he was not told about the medical problems Nichols had experienced before he arrived, and that Nichols was injured, seated on the ground and unresponsive.

Nichols had no pulse and was not breathing, and it “felt like he was lifeless,” Guy said.

In the ambulance, Guy performed CPR and provided mechanical ventilation, and Nichols had a pulse by the time he arrived at the hospital, the paramedic said.

Guy said Long and Sandridge did not say if they had checked Nichols’ pulse and heart rate, and they did not report if they had given him oxygen. When asked by one of Bean’s lawyers whether that information would have been helpful in treating Nichols, Guy said yes.

Long and Sandridge were fired for violating fire department policies after Nichols died. They have not been criminally charged.

The five officers also have been charged with second-degree murder in state court, where they pleaded not guilty. Mills and Martin are expected to change their pleas.

Federal prosecutors have previously recommended a 40-year sentence for Martin. A date has not been set in state court yet.

Nichols worked for FedEx, and he enjoyed skateboarding and photography. The city of Sacramento, where Nichols grew up, named a skatepark in his honor. “Tyre fell in love with skateboarding at a young age and it wasn’t long before it became a part of his lifestyle,” states the resolution approved by the city council. He had a tattoo of his mother’s name.

“Tyre Nichols’ family have been praying for justice and accountability from the very beginning of this tragedy,” Ben Crump and Antonio Romanucci, the civil rights attorneys representing Nichols’ family, said in a statement when the trial began. 



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Boeing set to start large-scale furloughs due to machinists strike

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Boeing’s CEO said Wednesday that the company will begin furloughing “a large number” of employees to conserve cash during the strike by union machinists that began last week.

Chief Executive Kelly Ortberg said the people who would be required to take time off without pay starting in coming days include executives, managers and other employees based in the U.S.

“While this is a tough decision that impacts everybody, it is in an effort to preserve our long-term future and help us navigate through this very difficult time,” Ortberg said in a company-wide message to staff.

Boeing didn’t say how many people will face rolling furloughs, but the number is expected to run into the tens of thousands. The aerospace giant had 171,000 employees at the start of the year.

About 33,000 Boeing factory workers in the Pacific Northwest began a strike Friday after rejecting a proposal to raise pay by 25% over four years. They want raises of at least 40%, the return of a traditional pension plan and other improvements in the contract offer they voted down.

Boeing's Seattle Workers Walk Out In First Strike Since 2008
Workers picket outside a Boeing in Everett, Washington, on  Sept. 16, 2024. 

Scott Brauer / Bloomberg via Getty Images


The strike is halting production of several airplane models including Boeing’s best-selling plane, the 737 Max. The company gets more than half of the purchase price when new planes are delivered to buyers, so the strike will quickly hurt Boeing’s cash flow.

Ortberg said selected employees will be furloughed for one week every four weeks while retaining their benefits. The CEO and other senior executives will take pay cuts during the duration of the strike, he said, without stating how deep the cuts will be.

All work related to safety, quality, customer support and certification of new planes will continue during the furloughs, he said, including production of 787 Dreamliner jets, which are built by nonunion workers in South Carolina.

Ortberg said in a memo to employees that the company is talking to the International Association of Machinists and Aerospace Workers about a new contract agreement that could be ratified.

“However, with production paused across many key programs in the Pacific Northwest, our business faces substantial challenges and it is important that we take difficult steps to preserve cash and ensure that Boeing is able to successfully recover,” he said.

Boeing’s chief financial officer warned employees earlier this week that temporary layoffs were possible.

The company, which is based in Arlington, Virginia, but has most of its commercial-airplanes business located in the Pacific Northwest, is also cutting spending on suppliers, freezing hiring and eliminating most travel.

Despite two full days of talks assisted by the Federal Mediation and Conciliation Service, the union said Wednesday that no resolution had been reached and no additional negotiations were scheduled, according to CBS Seattle affiliate KIRO-TV.

Striking workers are picketing at several locations in the Seattle area, Oregon and California. The union, which recommended the offer that members later rejected by a 96% vote, is surveying the workers to learn what they want in a new contract. The union’s last strike at Boeing, in 2008, lasted about two months.

If the walkout doesn’t end soon, Boeing’s credit rating could be downgraded to non-investment or junk status, which would make borrowing more expensive. Shortly after the walkout began Friday, Moody’s put Boeing on review for a possible downgrade, and Fitch said a strike longer than two weeks would make a downgrade more likely.



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A Moment With: Viswa Colluru

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Enveda Biosciences CEO and Founder Viswa Colluru shares his journey to delivering hope through new medicines

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