Refinancing a mortgage is a golden opportunity to lock in today's low interest rate for the next 15 or 30 years. While interest rates now are still low, there's a good chance they will be heading up in the coming months.
Based on current home prices and mortgage rates, the average monthly mortgage payment for Washington State home buyers would come to around $1,381, as of June 2017. Or slightly higher, if you add in property taxes and insurance.
Of course, there are a lot of variables that can influence the amount you might pay. And we can give you a detailed breakdown of what your monthly payments might be. But as for the average, here’s how we came up with that figure:
Calculating the Average Mortgage Payment in Washington State
To approximate the average monthly mortgage payment for Washington State home buyers in 2017, we used the current statewide median home price along with average mortgage rates. Factoring in a down payment of 10%, and choosing the popular 30-year fixed-rate home loan option, this came to a monthly payment of $1,381.
Here are the figures:
- Home price: According to the Runstad Center for Real Estate Studies at the University of Washington, the statewide median sales price rose to $324,300 during the first quarter of 2017. That’s the figure we started with to determine the average mortgage payment for Washington State. (Obviously, the median price is higher in places like Seattle.)
- Down payment: Some borrowers put down 20% or more to avoid private mortgage insurance, while others seek low-down-payment financing options due to having limited funds. Down payments range from 3% to 20% for most loans. So we used to 10%, which is probably close to the average.
- Loan amount: Ten percent of the median home price mentioned above is $32,430. Subtracting this from the median price gives us our hypothetical loan amount: $291,870.
- Mortgage rate: On June 1, 2017, Freddie Mac reported that the average rate for a 30-year fixed mortgage loan dropped to 3.94%. (On a side note, that was its lowest point of 2017 to date.) That’s the rate we used for our calculation.
- Payments: Financing this loan amount at 3.94% for 30 years would result in a monthly payment of around $1,381.
We’ve excluded property taxes and home insurance for the sake of simplicity. When adding those costs, the average monthly mortgage payment for Washington State would be slightly higher than the figure we arrived at.
This is just a hypothetical scenario to give you some sense of what the monthly payments would be for a median-priced home financed at average rates. As you can see, there are a lot of variables that determine housing costs. Actual payments will vary based on the amount being borrowed, the type of loan, the term length and mortgage rate, discount points, and other factors.
Washington State Home Buying Costs Still Rising in 2017
The average monthly mortgage payment for newly originated home loans in Washington has increased over the last couple of years. This is mainly the result of rising home values.
According to the housing analysts at Zillow, the median home value in the state rose by 10.2% over the last 12 months. That was a higher one-year gain than almost any other state in the country, with the exception of Oregon.
And while home prices appear to be rising more slowly now than in the last two years, they are still expected to trend north for the foreseeable future. As a result, the average monthly mortgage payment for Washington State will likely rise as well, through the end of 2017 and into 2018. Clearly, a case could be made for buying a home sooner rather than later.