Ask the Expert

I am 35 and I’ve never owned a home. Now that I am paying attention to mortgage rates, I see an increase. Should I wait — or worry?

Simply put: It’s a fantastic time to buy (and with home prices rising it is a great time to sell, too).

You are at exactly the right age, on the high end of the millennial generation, to buy a home.

It’s true that in the last couple of years, a string of incremental rate increases by The Federal Reserve has put the focus on the housing market, where mortgage rates reflect those rate increases. Some assume that, as The Fed raises short-term interest rates, mortgage rates also rise and buyers are scared off by higher monthly payments.

While payments do indeed rise, how serious is it? Sometimes it’s not as much as you might think. If you are not paying cash for your house, you have to get a loan anyway. It’s not unreasonable to ask how much a slight raise in rates actually affects your payments.

Online mortgage calculators let you plug in your purchase price, down payment, length of loan, and interest rate. A 30-year fixed loan for $200,000 at 4.5 percent results in a payment of $1,013. Here we aren’t factoring in a down payment, taxes, or insurance, which vary. (As you move along in your home purchase, you will have all that information.)

But compare that rate to the same loan for the same amount at 4.75 percent. The monthly payment is $1,043 — a difference of $30 a month. When you find the right home, a jump of $30 probably won’t be a deal killer.

Right now, The Fed has signaled that interest rates may not rise in the near term, since inflation is low. But remember, rates do rise and fall over time. In 1999, the mortgage rate was 6.98 percent. In the 1980s, rates were a catastrophic 18 percent. A rate of about 4.5 to 4.75 percent isn’t the lowest historically but it certainly is affordable and nowhere near the highest.

Have no fear about buying today. Inflation is low and even if it rises, your mortgage payment won’t.