The Interest Rate Isn’t the Whole Story

I hear it all the time right now:

“I want to buy, but interest rates are too high.”

And I completely understand why. The interest rate matters. But when you’re trying to figure out whether buying a home makes sense for you, I think there’s a better number to focus on:

What can I comfortably afford every month?

Instead of getting caught up in the interest rate alone, I encourage my clients to start by tracking their spending.

Look at where your money actually goes each month — groceries, restaurants, subscriptions, shopping, daycare, gas, entertainment, savings, etc. Once you know what your typical monthly spending looks like, you can start putting the pieces together:

Your current monthly spending + your potential PITI = your real monthly housing budget.

PITI stands for Principal, Interest, Taxes & Insurance — the core pieces of your monthly mortgage payment.

This exercise can be eye-opening because sometimes the home someone thinks they can afford and the home they can comfortably afford are two very different numbers.

And here's the other thing I remind my clients:

You are buying a home at today's price and today's payment — not today's interest rate forever.

Your purchase price, taxes, insurance and monthly budget are important considerations. The interest rate is simply one part of the equation, and unlike the purchase price, it can potentially change in the future if market conditions and your loan situation allow for refinancing.

That doesn't mean you should ignore interest rates or stretch your budget just to buy a home. It means you should understand your entire financial picture before deciding whether now is the right time for you.

If you're thinking about buying right now, my advice is simple:

Track your spending. Know your numbers. Know your comfortable monthly payment. Then let's work backward from there.

Buying a home shouldn't be about finding the biggest mortgage a lender will approve you for.

It should be about finding a payment that allows you to enjoy the home — and still live your life. ❤️