When people say, “I’m waiting for rates to come down,” what they’re really talking about is buying power, how much home you can afford at the same monthly payment.
Even small rate shifts can change your payment by hundreds per month, or your budget by tens of thousands. Here’s how it works (with real math), and how to use it to make smart moves in the Dallas–Fort Worth market.
Quick note: The examples below show principal + interest only on a 30-year fixed loan. Your full payment will also include taxes, insurance, and possibly HOA.
Why rates hit your payment so hard
A mortgage payment is basically rent you pay to the bank for borrowing money. The higher the interest rate, the more of your monthly payment goes to interest instead of paying down the loan, especially in the early years.
That’s why a “small” change (like 0.5%) isn’t small at all.
For context, Freddie Mac’s weekly survey had the 30-year fixed rate at 6.01% as of Feb 19, 2026.
Example 1: Same loan amount, different rates (what happens to payment)
Let’s use a $400,000 loan (principal amount financed).
30-year fixed payment (Principal + Interest):
- 5.5% → $2,271/mo
- 6.0% → $2,398/mo
- 6.5% → $2,528/mo
- 7.0% → $2,661/mo
What that means:
Going from 6.0% to 6.5% increases payment about $130/mo on a $400K loan.
Going from 6.0% to 7.0% increases payment about $263/mo.
Over time, that difference becomes real money.
Example 2: Same monthly payment, different rates (what happens to buying power)
Now let’s flip it. Say you want to keep your mortgage payment around $2,400/mo (P&I).
At that same payment, your approximate loan amount becomes:
- 5.5% → $422,692
- 6.0% → $400,300
- 6.5% → $379,706
- 7.0% → $360,738
What that means:
At 6.0%, you can finance about $400K.
At 7.0%, to keep the same payment, you’re closer to $361K about $39K less buying power.
This is why rate changes influence:
- what neighborhoods you consider
- what size/condition home feels realistic
- how aggressive you can be in negotiations
The part most people miss: rates also affect competition
When rates dip, more buyers re-enter the market because payments feel doable again. That can mean:
- more showings
- faster timelines
- multiple offers (especially on well-positioned homes)
When rates rise, buyers get pickier and negotiation becomes more common, particularly on homes that are overpriced or need work.
So the “best” time isn’t always about the lowest rate. It’s about the best strategy for the market you’re in.
How to use this to your advantage (buyer + seller)
If you’re buying:
- Focus on monthly payment comfort, not just purchase price.
- Ask about seller concessions (when available) that can help reduce your effective payment.
- Be ready to move quickly on homes that are priced right, those still get attention even in slower conditions.
If you’re selling:
- Pricing and presentation matter even more when rates are higher.
- Buyers can’t “stretch” like they used to, so your home must feel worth it, online and in person.
- A strategic list price can reduce days on market and protect your net.
If you want to know what interest rates mean for your buying power or what your home could realistically sell for in today’s Dallas–Fort Worth market, Maher Magic can run the numbers, compare your options, and build a clear plan based on your goals.
Reach out today to schedule a consult. You’ll walk away with clarity on payment scenarios, pricing strategy, and the smartest next step, so you don’t make a major move based on guesswork.