Connect with us

CBS News

Here’s how much a $400,000 mortgage will cost after the Fed cuts rates

Avatar

Published

on


Wooden blocks percentage sign, arrow up and down with house model background.
The monthly payments on a $400,000 mortgage loan could get cheaper in the near future as rates drop. 

Getty Images


In today’s housing market, few factors hold as much sway over potential homebuyers as mortgage rates. After all, mortgage rates are significantly higher than they were just a few years ago when buyers were able to obtain mortgages with rates of 3% or lower. As a result, buying a home now can be a costly proposition, especially when you factor in that high home prices and limited for-sale inventory are also pushing up the cost.

But mortgage rates have fallen in recent weeks, and the first Federal Reserve rate cut of the year is looming. While the initial rate cut is expected to be just 25 basis points, even a slightly lower mortgage rate could result in big savings on the cost of a mortgage loan. There are likely more Fed rate cuts on the horizon, too, which could mean that mortgage rates could drop even lower over time. 

In turn, many prospective buyers are wondering whether it makes sense to act now or wait for lower rates to pan out. That answer depends on factors like your budget and optimal timeline, but it can help to know what today’s costs are and what they could be after rates are cut. So, how much would the monthly mortgage payments be on a $400,000 loan at the current rates — and how much you could save if you waited for rates to drop

Compare today’s top mortgage loan rates here to find the right option for you.

Here’s how much a $400,000 mortgage will cost after the Fed cuts rates

To understand the potential impact of rate cuts on a $400,000 mortgage, let’s first examine the current landscape. As of September 13, 2024, the average 30-year fixed mortgage rate stands at 6.41%, while the 15-year fixed rate is 5.78%. 

Using these figures as our baseline, here’s what you can expect the monthly payments to be on a $400,000 mortgage, assuming a 20% down payment of $80,000:

  • 30-year mortgage at 6.41%: $2,003.71 per month
  • 15-year mortgage at 5.78%: $2,662.46 per month

These amounts represent principal and interest payments only. Homeowners should be aware that actual monthly costs will be higher when factoring in property taxes, homeowners insurance and private mortgage insurance (PMI) if the down payment is less than 20%.

Now, let’s explore how these payments might change if the Federal Reserve implements rate cuts:

Scenario 1: A 0.25% Fed rate cut

If the Fed cuts rates by 25 basis points at its upcoming meeting and mortgage rates follow suit, the new monthly payments on a $400,000 mortgage loan could look like this:

  • 30-year mortgage at 6.16%: $1,951.60 per month
  • 15-year mortgage at 5.53%: $2,619.76 per month

In this scenario, borrowers could save approximately $52 per month on a 30-year mortgage or about $43 per month on a 15-year mortgage.

Scenario 2: A collective 0.50% Fed rate cut 

If the Fed implements multiple rate cuts totaling half a percentage point over the coming months, and mortgage rates drop by the same amount, the potential savings become more substantial:

  • 30-year mortgage at 5.91%: $1,900.08 per month
  • 15-year mortgage at 5.28%: $2,577.46 per month

With a half-point reduction in rates, borrowers could see monthly savings of about $104 on a 30-year mortgage or about $85 on a 15-year mortgage compared to the monthly cost at current rates.

Over the life of the loan, the monthly savings can add up significantly. For example, saving $104 per month on a 30-year mortgage would result in total savings of over $37,000 over the full term of the loan. This illustrates the potential long-term impact of even small changes in interest rates.

It’s important to note, though, that the calculations above assume mortgage rates will move in tandem with Fed rate cuts. In reality, the relationship between mortgage rates and the Fed rate is more complex, and other economic factors can also play a role.

Find out whether today’s best mortgage loans are the right fit for your budget.

Why you may want to lock in a mortgage rate now

While the prospect of lower mortgage rates is enticing, you might want to consider locking in a rate sooner rather than later. Here’s why:

  • Market uncertainty: While rate cuts are expected, their timing and magnitude are not guaranteed. Not only are expected rate changes typically factored in before they occur, but economic conditions can change rapidly, potentially leading to unexpected rate increases.
  • Home price trends: As rates decrease, demand for homes often increases, which can drive up property prices. In turn, the money saved on interest might be offset by having to pay a higher purchase price if you wait.
  • Opportunity cost: Every month spent waiting for lower rates is a month of paying rent instead of building equity in a home. This lost opportunity for wealth accumulation should be factored into your decision.
  • Competitive advantage: In a market with limited inventory, having a rate locked in can make your offer more attractive to sellers, potentially giving you an edge over other buyers.
  • Historical context: While current rates may seem high compared to recent years, they are still relatively low from a historical perspective. 
  • Refinancing option: If rates do drop significantly in the future, you still have the option to refinance your mortgage, potentially benefiting from both current opportunities and future rate decreases.

The bottom line

While the upcoming Fed rate cuts could lead to savings on a $400,000 mortgage, the benefits must be weighed against the risks and opportunities of acting sooner. If a lower rate could mean the difference between affording a home and being priced out, it could make sense to wait for rates to fall before buying a home. But if you’re worried about the potential for more buyers to enter the market, driving home prices and competition up, you may want to lock in your rate now instead.



Read the original article

Leave your vote

Continue Reading

CBS News

Whooping cough wave now worst in almost a decade amid back-to-school surge

Avatar

Published

on


South Jersey family shares scary experience with whooping cough


South Jersey family shares scary experience with whooping cough

02:12

This year’s resurgence of whooping cough cases has now accelerated to the fastest pace on record in nearly a decade, according to figures published Thursday by the Centers for Disease Control and Prevention, as pertussis infections are now again climbing around the country during the back-to-school season.

A total of 291 cases were reported for the week ending on Sept. 14, the CDC says. New York has reported the most cases this week of any state, with 44 infections. Ohio, Pennsylvania and Oklahoma have also reported at least 38 cases each.

This now marks the most infections of the bacteria Bordatella pertussis reported to the CDC in a single week since 2015, when the country was coming off a resurgence of whooping cough cases that had peaked the year before.

Whooping cough disease, caused by the pertussis bacteria, typically starts around a week after people are first exposed to another contagious person. Symptoms can last for weeks to months, typically with the disease’s infamous “whooping” as patients struggle to breathe after facing a burst of coughs.

So far this year, 14,569 cases have been reported to the agency, more than four times higher than the number of infections reported by this time last year. 

Cases are also higher than the more than 10,000 cases that were reported by this time in 2019, before COVID-19 pandemic measures also caused plummeting cases of pertussis and other infections that spread through the air.

The need for better whooping cough vaccines

While unvaccinated young children and newborns delivered by unvaccinated moms remain at the highest risk of infection and severe disease from whooping cough, federal health officials have warned for months that the U.S. was likely to see a resurgence of breakthrough infections in older children and adults.

Pertussis cases have largely grown over the past few decades, after the U.S. and other high-income countries switched to pertussis vaccines after the 1970s that triggered fewer side effects but also are less effective at guarding against disease and spread.

Officials in Pennsylvania, which has seen one of the country’s largest pertussis outbreaks this year, say that many outbreaks have been fueled by high school students.

“Cases and outbreaks have continued throughout the summer even though most schools were closed,” the department said in an alert to doctors in the state this month, urging doctors to prepare for the possibility of a “continued increase” as schools resumed.

In New York, 40% of their cases this year outside of New York City have been in teens ages 15 to 19 years old, according to figures the state’s health department shared with CBS News. 

“[W]e are not seeing evidence of a specific cluster or location or event. Cases have been identified all over the state and among children and adolescents in various settings,” a spokesperson for the New York State Department of Health said.

In Oklahoma, which has seen one of the steepest increases in cases of any state over recent weeks, cases have been seen in people as old as 86 years old. The median age of cases is 9 years old, the health department said.

“Since Jan. 1, 2024, there have been 162 cases of whooping cough in Oklahoma, which is the highest number of cases since 2017 when 207 cases were reported,” Erica Rankin-Riley, a spokesperson for the Oklahoma State Department of Health, told CBS News.

Talks on new trials

The resurgence comes as the Food and Drug Administration is now weighing the prospect of human challenge trials – studies intentionally infecting vaccinated volunteers with the bacteria – in the hopes of accelerating the development of more effective shots to fend off the bacteria.

A panel of the FDA’s advisers are scheduled to meet Friday to discuss the trials, which could lead to vetting “new pertussis vaccines for booster vaccination of adults.”

The CDC currently recommends a number of pertussis shots for children and adults, including boosters of the Tdap vaccine – which contains antigens designed to protect against pertussis – for all adults every 10 years. 

Around 39% of adults have gotten a pertussis booster in the last 10 years, CDC survey data from 2022 suggests.

Other factors may also be contributing to rising cases, the FDA said, like mutations in circulating pertussis strains and the “rapid waning” of immunity.

The current generation of “acellular pertussis” vaccines are still believed to “provide a significant public health benefit by preventing disease,” the FDA said in briefing documents published ahead of the meeting.

“Despite the resurgence of pertussis, current rates of disease are very low relative to the rates reported during the pre-vaccine era,” agency officials wrote.



Read the original article

Leave your vote

Continue Reading

CBS News

These major employers are making workers return to the office

Avatar

Published

on


Amazon sent shockwaves through its ranks — and corporate America — Monday when CEO Andrew Jassy told workers they will be expected to report to the office five days a week starting in January. 

The decision represents one of the most stringent return to office policies from a major corporation since the pandemic, when offices were suddenly shuttered and many employees shifted to remote work. Amazon’s move is also unusual for a business in the tech industry, which has largely embraced remote and hybrid work arrangements. 

Under the company’s current mandate, Amazon workers have been reporting to their physical offices three days a week, although that will expire by the beginning of next year. While advocates of in-office work argue that showing up in person helps foster collaboration and feelings of connectedness, skeptics say Amazon could be imposing the mandate to reduce headcount, as some employees may search for more flexible jobs and depart, without having to lay off workers. 

For his part, Jassy said the move is designed to improve company culture. But Amazon workers are reportedly grousing on internal forums about the move. 

Amazon isn’t alone in reining in remote work. Here are a few of the major employers that have summoned workers back to the office. 

Amazon

CEO Andrew Jassy said the back-to-the-office decision is based on his observation that collaborating and brainstorming work better when people are together in the office.

To foster a culture of collaboration, “we’ve decided that we’re going to return to being in the office the way we were before the onset of COVID,” Jassy said in a memo to employees posted on Amazon’s website. “When we look back over the last five years, we continue to believe that the advantages of being together in the office are significant.”

Disney 

Disney mandates that employees work in the office four days a week, typically Monday to Thursday. 

“[I]n a creative business like ours, nothing can replace the ability to connect, observe and create with peers that comes from being physically together, nor the opportunity to grow professionally by learning from leaders and mentors,” CEO Bob Iger said in a 2023 memo to employees. 

JPMorgan

JPMorgan CEO Jamie Dimon is a staunch advocate of in-person work, and once blasted remote work as a policy that “does not work for younger people. It doesn’t work for those who want to hustle,” he said at a business forum. He was among the first leaders to summon employees back to the workplace. 

As of April 2023, workers have been reporting to JPMorgan offices at least three times a week. The company is reportedly tracking attendance, too. 

Starbucks

While the coffee giant’s new CEO Brian Niccol will commute to Starbucks’ Seattle headquarters from his Newport Beach, California residence, most other workers likely live in closer proximity to their offices, given that they must be at their desks three days a week. 

Niccol is not exempt from following the mandate, according to the company. 

X owner Elon Musk has consistently opposed remote work, saying he believes workers are more productive when working from a corporate office. 

In 2022, he said all X workers would be expected to report to the office on a full-time basis, and that he would interpret a failure to show up as a resignation from the company. 

Zoom

Even pandemic icon Zoom, one of the companies that benefitted the most from remote work, last summer told workers who live near a company office to report to their desks at least two times a week, a company spokesperson told CBS MoneyWatch. 

The mandate applies to its roughly 7,400 workers who live near a Zoom office, the videoconferencing platform said at the time. 



Read the original article

Leave your vote

Continue Reading

CBS News

White House hasn’t weighed in on Iran hacking Trump campaign

Avatar

Published

on


White House hasn’t weighed in on Iran hacking Trump campaign – CBS News


Watch CBS News



The White House has not weighed in on reports of Iran hacking the Trump campaign for sensitive information that apparently was offered to President Biden’s campaign in the summer. CBS News senior White House and political correspondent Ed O’Keefe reports.

Be the first to know

Get browser notifications for breaking news, live events, and exclusive reporting.




Read the original article

Leave your vote

Continue Reading

Copyright © 2024 Breaking MN

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.