The Rising Interest Rates

Of 2022

The current buzz around the block is that interest rates are skyrocketing. “Why?” you might ask. Well, it’s all part of the Federal Reserve’s efforts to allay rising inflation. The unfortunate effect is that all loans are tagged with much higher interest rates. This doesn’t just affect real estate, but also personal loans and business loans. Let’s look at how rising rates affect mortgages, and what that looks like for the average prospective Longmont resident. 


September 2022  Mortgage Rates

  30 Year Fixed  15 Year Fixed  10/6 ARM
          7.3%          6.4%      7.7%


The Federal Reserve has raised interest rates on their loans to 3-3.25%, which has driven up mortgage loans to over 7%. We haven’t seen interest rates like this since about 2009, when inventory was extremely high and housing prices were dropping. Unlike the 2008-2010 real estate market, housing prices are continuing to rise and inventory is still moving at a relatively healthy pace. Pre-COVID, interest rates were sitting between 4-4.75% for home mortgage loans, and during the COVID years they dropped to a record low of of ~2.5%! We probably won’t be seeing these low rates for several years. Over the past 30 years the average mortgage interest rate is 7.8%, which means we’re just now coming to that marker with these new rate increases.


What Does This Mean?

With rising interest rates comes higher monthly mortgage payments. It’s an unfortunate, unavoidable correlation. This also means you’ll be paying more in interest over time than in previous months. In order to allay some of these extra costs with higher interest rates, it’s a good idea to secure a larger down payment. This reduces the principle from which interest is calculated and can help dramatically reduce your monthly payment. During the past few years, it was common for realtors and mortgage brokers to recommend 10% down payments. Now, we highly recommend putting down as much as possible, up to 30% if possible, just to help reduce the principle before incurring interest. 


Monthly Payment Chart

This chart shows the monthly payments for average home values in the Denver Metro Area with the interest rates pre- and post-COVID. These numbers are based on a 30 Year Fixed Mortgage with approximately 10% down payment.

City/AreaAvg Home ValuePre-COVID Avg Monthly PaymentPost-COVID Avg Monthly PaymentPost-COVID Avg Monthly Payment w/ 30% Down
Boulder County$830,000$3,574$4,981$3,857
Denver Metro Area$580,000$2,493$3,474$2,699

As you can see, putting more down on your principle dramatically affects your monthly payments. Saving for this lump sum is a very strategic move to save you money in the long run, especially with interest rates so high. To calculate your potential monthly mortgage payment, go to and scroll down to our Mortgage Calculator!


Don’t let the rising interest rates push you away from finding you dream home. Get in touch with The Wise Team today. We can help you build a plan to navigate these shifting real estate markets and find the perfect home for you and your family, no matter the size!