Brief Improving Home Affordability through Low Interest Rates
How Much Would Homeowners in Low-Income Areas Save?
Robert I. Lerman, Leah Hendey
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Using data from the Making Connections Cross-site Survey, this fact finds that, on average, families would save about $276 per month in mortgage payments with a new five percent interest rate, 30-year mortgage. Lower interest rates both increase housing affordability and allow families to accumulate equity in their homes more quickly. This fact highlights the importance of improving financial literacy, information and education around mortgage pricing, and of helping families build good credit. Families included in the data live in selected low-income neighborhoods in six cities and were surveyed as part of the Annie E. Casey Foundation's Making Connections initiative.
Research Areas Wealth and financial well-being Families
Tags Asset and debts Family and household data Opportunity and ownership
Policy Centers Metropolitan Housing and Communities Policy Center