Mike MilliganFounder and CEO, 1.oak Financial · Founder and CEO, 1.oak Financial

Before You Buy the House, Ask Yourself This | 7.45% Mortgage Rates

25 Sept 2026 · 1 min

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In this brief commentary, Mike Milligan illustrates how a rise in mortgage interest rates dramatically increases monthly housing costs. Using a $400,000, 30‑year loan as an example, he shows that the principal‑and‑interest payment jumps from $2,400 at a 6% rate to about $2,783 at a 7.45% rate—an extra $385 each month before taxes and insurance. He argues that a flat stock market does not imply a flat cost of borrowing and urges prospective homebuyers to examine how the mortgage payment fits into their overall budget, emphasizing the need to assess the remaining disposable income after the payment.

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Let's make it real with a hypothetical. A $400,000 mortgage paid over 30 years has monthly principal and interest payments of $2,400 at 6%. At 7.45%, that becomes about $2,783. That's roughly $385 more every month before property taxes, insurance, or other housing costs. Same loan, different room in the family budget. The stress is real. That is why a flat stock market does not mean a flat cost of money. Before buying a home, ask what the payment leaves— well, ask what the payment that leaves your checking account is and what room it leaves in the rest of your budget.