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Mortgage Market Update
My Mortgage Company
Ken Schmidt
Thursday, August 27, 2026
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How much home equity are you building? |
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Hi there — this week I want to shine a light on something that happens quietly in the background of every mortgage payment you make.
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National Mortgage Rates · August 20, 2026
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Source: Freddie Mac PMMS & Optimal Blue via FRED
Rates shown are national averages and are provided for informational purposes only. Actual rates vary based on credit profile, loan amount, and market conditions. Please contact us for a personalized rate quote.
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Equity Building
What your mortgage payment is actually doing
Every month, part of your mortgage payment goes toward interest, and part goes toward principal — that principal payment is you building equity in your home. Early on, more of your payment covers interest, but over time the balance shifts and equity grows faster. This matters because equity is real wealth you can tap into later through refinancing or a home equity loan if you need it. The sooner you understand how your specific loan is building that equity, the better you can plan ahead. If you'd like to see a breakdown of how your payments are working for you, I'm happy to walk through the numbers. Reach out if you'd like to see how much equity you're building each month.
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Tip of the Week
Your mortgage interest may be tax-deductible if you itemize. Check with your tax professional to see if it benefits you.
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Tips for Homeowners
Understanding Mortgage Points
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1.
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One mortgage point equals 1% of your loan amount. Paying points ("buying down the rate") reduces your interest rate — typically 0.25% per point, though this varies by lender and market.
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2.
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Calculate your break-even: divide the cost of the points by your monthly savings. If it takes 4 years to break even and you plan to stay 10 years, buying points makes sense.
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3.
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Points paid on a home purchase are generally tax-deductible in the year paid (if you itemize). Points on a refinance must be deducted over the life of the loan.
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Have questions about how any of this affects your mortgage or home purchase? We're here to help — reach out to the My Mortgage Company team any time and we'll walk you through your options. |
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Your Mortgage Advisor
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My Mortgage Company
Ken Schmidt
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