Let’s look at the numbers for a $200,000 home in the Burlington Vermont Area. Assume your taxes are about 1.2% of the purchase price -$2,400/year & your insurance is about 0.5% of your purchase price (about $600/year). This may be a bit low, but you will see the difference clearly in the example. An FHA loan with the minimum 3.5% down at 4.75% for a 30 year fixed mortgage, PITI would be $1,446 per month.If rates went up to 5.75%, your PITI would be $1,567 per month.
That’s over $121 per month savings. That means you can purchase about $24,000 more house for about the same payment!