With rates hovering near historical lows, a mortgage of $350k (principle and interest) will run around $1847/month at a rate of 4.85%. If rates go up to 6% next year that same mortgage will now run you about $2100.00 (principle and interest). That is a difference of $253 per month! OR if you are qualified up to $350k now and rates go up to 6% next year, then at that time you will only be able to buy a home for $308k to keep your payments the same they would be at the previous $350k with a 4.85% rate. That will be quite a change in what you can buy for the money! Here is a helpful (and somewhat corny) video that explains it even better.
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