Which has more effect on payments, price or interest rate?

My friend Danny Williams of Georgia took time out of hunting for rattlesnakes in Texas to send me this:

Most people would guess price.

“Did you know that even if home prices were to decline 10%, but also during that time interest rates available for home loans were to increase by 1%, your monthly principal and interest payment would actually be higher?”

Of course that statement sent me to my financial calculator. I figured the difference in payments for a 30 year mortgage of $100,000 at 6%, versus a $90,000 mortgage at 7% is less than $1 per month. WOW!!!!

Would you have guessed that? Most people would not.

It reinforces to me why John Schaub has always said, “Every one tenth% of interest is worth fighting for!”

Some people knew that already, but many more learned something here.