Price Drop or Rate Drop?

Price Drop or Rate Drop? How to Bring Affordability Back 

Affordability is crucial in today’s market. If a seller has $15,000 to help close a deal, should they drop the price or reduce the interest rate?


➡️ Price Drop ($15k Reduction)

  • New Price: $485,000
  • Monthly Savings: $106.47

Effect: Helps bring in buyers qualified for $485,000 but only saves a small amount each month


➡️ Rate Drop ($15k to Lower Rate)

  • Interest Rate: Reduced from 6.99% to 5.99%
  • Monthly Savings: $311.56

Effect: Makes the home affordable to buyers, originally approved at $459,000 significantly expanding the pool of potential buyers


➡️ Key Takeaway

Price Drop: Attracts buyers at $485,000

Rate Drop: Attracts buyers previously qualified at $459,000


For Buyer's Agents: Use this strategy to help clients afford higher-priced homes without overextending their budgets. Negotiating a rate reduction is often a better solution than a simple price cut to make homes more affordable.


Let’s work together to bring affordability back and make the market work for everyone!

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