How Do Today’s Monthly Payments and Long-Term Interest Costs Compare to Last Year?

What a difference a year makes—or does it? If you’re tracking the housing market, you know that even small shifts in mortgage rates and home prices can have a ripple effect on your wallet. Let’s break down how today’s monthly payments and long-term interest costs compare to last year, using real numbers and a bit of storytelling to make it all come alive.

Monthly Payments: 2025 vs. 2024

Imagine you’re house hunting in May 2025. According to Zillow, the typical home price is about $368,000. You put down 20% and lock in a 30-year fixed mortgage at 6.89%. Your monthly principal and interest payment? Around $1,936.

Now, rewind to May 2024: the average home was slightly less expensive at $365,000, but mortgage rates were a tad higher—7.03%. That bumps your monthly payment up to $1,948.

So, in 2025, you’re saving about $12 a month compared to buyers from the year before. It might not sound like much—about the cost of a couple of fancy coffees—but over time, every dollar counts!

Long-Term Interest Savings

Here’s where things get a bit more interesting. Over the life of a 30-year mortgage, that small difference in rates and home price adds up. In this scenario, 2025 buyers save $6,583 in total interest compared to those who bought in 2024. That’s enough for a memorable vacation, a home upgrade, or a healthy boost to your emergency fund.

The Takeaway: Small Changes, Big Picture

While the difference isn’t dramatic, it highlights how even modest shifts in rates and prices can affect your long-term costs. Many buyers are waiting for that “big drop” in rates, but as we can see, sometimes the market moves in inches, not leaps. If you’re on the fence, it’s worth running the numbers for your own situation—tools like the Forbes Advisor mortgage calculator can help you see the full picture.

In the world of home buying, timing matters, but so does perspective. Whether you’re saving a little each month or a little more over decades, every bit helps you build your home and your financial future. 🏡