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How much will an $800,000 mortgage cost monthly after rate cuts?
Many steps go into the homebuying process, but one of the most important is accurate budget calculations. Without this, buyers could wind up getting rejected for offers on homes they want – or they could be accepted only to later determine that they can’t comfortably afford the monthly mortgage payments. It’s critical, then, to crunch the numbers in advance so that you know exactly what your payments will look like once you close on the home. In a normal rate climate, this can be relatively easy to complete. But in today’s evolving climate, it can be a bit more challenging.
That’s because mortgage interest rates are falling again after reaching their highest peak since 2000 last summer. And with the Federal Reserve now set to issue its first rate cut in four years, buyers are positioned to see some additional financial relief, perhaps as soon as this week. So it’s important for buyers to both calculate what their monthly mortgage payments will be at today’s rates as well as what they could look like after rate cuts. And with home prices rising and more homes worth $1 million or more in today’s market, many would benefit from calculating the costs of a $800,000 mortgage now. Below, we’ll do the math.
See how low of a mortgage rate you could lock in here now.
How much will a $800,000 mortgage cost monthly after rate cuts?
An $800,000 mortgage loan won’t be cheap. But the good news is that it will become more affordable for borrowers if a series of interest rate cuts are issued, as many expect to happen throughout the rest of 2024 and into 2025.
To start, here’s what an $800,000 mortgage would cost at today’s average rates, assuming the conventional 20% down payment ($160,000) for principal and interest only:
- 15-year mortgage at 5.78%: $5,324.91 per month
- 30-year mortgage at 6.41%: $4,007.43 per month
While today’s rates, depending on the lender, may already have a 25 basis point reduction priced in, it still helps to know what borrowers could expect once mortgage rates formally fall by the same increment:
- 15-year mortgage at 5.53%: $5,239.53 per month
- 30-year mortgage at 6.16%: $3,903.20 per month
And here’s what an $800,000 monthly mortgage payment would look like if today’s rates were half a percentage point lower (using the same caveats as noted above):
- 15-year mortgage at 5.28%: $5,154.92 per month
- 30-year mortgage at 5.91%: $3,800.17 per month
Optimistic that mortgage rates could fall even faster? While many experts don’t share that view, here’s what your payments could look like if rates eventually come down a full point lower than today’s averages:
- 15-year mortgage at 4.78%: $4,988.04 per month
- 30-year mortgage at 5.41%: $3,597.79 per month
So while you could potentially save hundreds of dollars each month by waiting for a full percentage point reduction, it may be better to act now, even if it means securing a slightly higher rate. Lower rates, after all, could attract more buyers and cause home prices to rise, quickly wiping out any savings secured with a lower rate.
See what mortgage interest rate you’re eligible for here.
Don’t forget other expenses
While the above monthly mortgage payments may seem manageable on the surface, it’s important to remember that they don’t account for homeowners insurance and taxes, two items which are often rolled into your monthly mortgage payment (assuming you don’t pay them annually). The above payments also don’t account for the private mortgage insurance (PMI) that you’ll need to account for if you pay less than the 20% down payment.
And those costs don’t incorporate mortgage points, which may be worth investigating, especially in today’s rate climate. So you’ll want to know what these costs are, too, and know which way you plan on paying them to more accurately determine exactly how much your monthly payment will be for this loan amount.
The bottom line
Mortgage payments on an $800,000 loan amount could be lower in the weeks and months to come and significantly lower if buyers wait until next year to act. However, waiting in today’s climate poses its own set of complications that will need to be addressed personally by each buyer. But if you can afford payments at today’s rates now — along with the costs of insurance, taxes and possible PMI and mortgage points — it may be beneficial to take action before additional buyers flood the market. That could cause home prices to rise and easily negate any rate savings you may have expected to earn by delaying.
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In praise of Seattle-style teriyaki
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Gazan chefs cook up hope and humanity for online audience
Renad Atallah is an unlikely internet sensation: a 10-year-old chef, with a repertoire of simple recipes, cooking in war-torn Gaza. She has nearly a million followers on Instagram, who’ve witnessed her delight as she unpacks parcels of food aid.
We interviewed Renad via satellite, though we were just 50 miles away, in Tel Aviv. [Israel doesn’t allow outside journalists into Gaza, except on brief trips with the country’s military.]
“There are a lot of dishes I’d like to cook, but the ingredients aren’t available in the market,” Renad told us. “Milk used to be easy to buy, but now it’s become very expensive.”
I asked, “How does it feel when so many people like your internet videos?”
“All the comments were positive,” she said. “When I’m feeling tired or sad and I want something to cheer me up, I read the comments.”
We sent a local camera crew to Renad’s home as she made Ful, a traditional Middle Eastern bean stew. Her older sister Noorhan says they never expected the videos to go viral. “Amazing food,” Noorhan said, who added that her sibling made her “very surprised!”
After more than a year of war, the Gaza Strip lies in ruins. Nearly everyone has been displaced from their homes. The United Nations says close to two million people are experiencing critical levels of hunger.
Hamada Shaqoura is another chef showing the outside world how Gazans are getting by, relying on food from aid packages, and cooking with a single gas burner in a tent.
Shaqoura also volunteers with the charity Watermelon Relief, which makes sweet treats for Gaza’s children.
In his videos online, Shaqoura always appears very serious. Asked why, he replied, “The situation does not call for smiling. What you see on screen will never show you how hard life is here.”
Before dawn one recent morning in Israel, we watched the UN’s World Food Program load nearly two dozen trucks with flour, headed across the border. The problem is not a lack of food; the problem is getting the food into the Gaza Strip, and into the hands of those who desperately need it.
The UN has repeatedly accused Israel of obstructing aid deliveries to Gaza. Israel’s government denies that, and claims that Hamas is hijacking aid.
“For all the actors that are on the ground, let the humanitarians do their work,” said Antoine Renard, the World Food Program’s director in the Palestinian territories.
I asked, “Some people might see these two chefs and think, well, they’re cooking, they have food.”
“They have food, but they don’t have the right food; they’re trying to accommodate with anything that they can find,” Renard said.
Even in our darkest hour, food can bring comfort. But for many in Gaza, there’s only the anxiety of not knowing where they’ll find their next meal.
For more info:
Story produced by Mikaela Bufano. Editor: Carol Ross.
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“Sunday Morning” 2024 “Food Issue” recipe index
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A study to devise nutritional guidance just for you
It’s been said the best meals come from the heart, not from a recipe book. But at this USDA kitchen, there’s no pinch of this, dash of that, no dollops or smidgens of anything. Here, nutritionists in white coats painstakingly measure every single ingredient, down to the tenth of a gram.
Sheryn Stover is expected to eat every crumb of her pizza; any tiny morsels she does miss go back to the kitchen, where they’re scrutinized like evidence of some dietary crime.
Stover (or participant #8180, as she’s known) is one of some 10,000 volunteers enrolled in a $170 million nutrition study run by the National Institutes of Health. “At 78, not many people get to do studies that are going to affect a great amount of people, and I thought this was a great opportunity to do that,” she said.
It’s called the Nutrition for Precision Health Study. “When I tell people about the study, the reaction usually is, ‘Oh, that’s so cool, can I do it?'” said coordinator Holly Nicastro.
She explained just what “precise” precisely means: “Precision nutrition means tailoring nutrition or dietary guidance to the individual.”
The government has long offered guidelines to help us eat better. In the 1940s we had the “Basic 7.” In the ’50s, the “Basic 4.” We’ve had the “Food Wheel,” the “Food Pyramid,” and currently, “My Plate.”
They’re all well-intentioned, except they’re all based on averages – what works best for most people, most of the time. But according to Nicastro, there is no one best way to eat. “We know from virtually every nutrition study ever conducted, we have inner individual variability,” she said. “That means we have some people that are going to respond, and some people that aren’t. There’s no one-size-fits-all.”
The study’s participants, like Stover, are all being drawn from another NIH study program called All Of Us, a massive undertaking to create a database of at least a million people who are volunteering everything from their electronic health records to their DNA. It was from that All of Us research that Stover discovered she has the gene that makes some foods taste bitter, which could explain why she ate more of one kind of food than another.
Professor Sai Das, who oversees the study at Tufts University, says the goal of precision nutrition is to drill down even deeper into those individual differences. “We’re moving away from just saying everybody go do this, to being able to say, ‘Okay, if you have X, Y and Z characteristics, then you’re more likely to respond to a diet, and somebody else that has A, B and C characteristics will be responding to the diet differently,'” Das said.
It’s a big commitment for Stover, who is one of 150 people being paid to live at a handful of test sites around the country for six weeks – two weeks at a time. It’s so precise she can’t even go for a walk without a dietary chaperone. “Well, you could stop and buy candy … God forbid, you can’t do that!” she laughed.
While she’s here, everything from her resting metabolic rate, her body fat percentage, her bone mineral content, even the microbes in her gut (digested by a machine that essentially is a smart toilet paper reading device) are being analyzed for how hers may differ from someone else’s.
Nicastro said, “We really think that what’s going on in your poop is going to tell us a lot of information about your health and how you respond to food.”
Stover says she doesn’t mind, except for the odd sounds the machine makes. While she is a live-in participant, thousands of others are participating from their homes, where electronic wearables track all kinds of health data, including special glasses that record everything they eat, activated when someone starts chewing. Artificial intelligence can then be used to determine not only which foods the person is eating, but how many calories are consumed.
This study is expected to be wrapped up by 2027, and because of it, we may indeed know not only to eat more fruits and vegetables, but what combination of foods is really best for us. The question that even Holly Nicastro can’t answer is, will we listen? “You can lead a horse to water; you can’t make them drink,” she said. “We can tailor the interventions all day. But one hypothesis I have is that if the guidance is tailored to the individual, it’s going to make that individual more likely to follow it, because this is for me, this was designed for me.”
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Story produced by Mark Hudspeth. Editor: Ed Givnish.
“Sunday Morning” 2024 “Food Issue” recipe index
Delicious menu suggestions from top chefs, cookbook authors, food writers, restaurateurs, and the editors of Food & Wine magazine.