A lot of buyers in Bonney Lake, Lake Tapps, Sumner, Buckley, Auburn, Milton, and Edgewood hear “rates are down” and assume their monthly payment will drop a lot. The catch is this: your payment is usually not just the loan. It’s the loan plus property taxes plus homeowners insurance. In Pierce County, even a small jump in taxes and insurance can wipe out most of the savings from a lower interest rate.
When people talk about “current mortgage rates,” they usually mean an average rate from a national survey. Freddie Mac’s weekly survey shows the 30-year fixed average was 6.16% as of January 8, 2026. Your personal rate can be different based on credit score, down payment, loan type, and points. For today’s example math, we’re using a clean, simple 30-year fixed conventional loan at 5.99% to show how payment changes work.
The key idea: even if the interest rate drops, your total monthly payment can stay the same (or rise) if taxes and insurance rise at the same time.
Let’s use a common local example price: $500,000 purchase with 20% down ($100,000). That means the loan amount is $400,000. On a 30-year fixed at 5.99%, the Principal + Interest payment is $2,395.63 per month (rounded: $2,396). If the rate were 6.49% instead, it would be $2,525.64 per month (rounded: $2,526). If the rate were 6.99% instead, it would be $2,658.52 per month (rounded: $2,659). Those are exact payment calculations for a fully-amortizing 30-year loan.
Exact savings in this example (same $400,000 loan):
Property taxes are real money that most lenders collect monthly in your escrow payment. Pierce County publishes levy rate and tax information by district, and taxes can change based on area and levy mix. Countywide property taxes billed increased 3.9% from 2023 to 2024, which shows the direction has been up overall. A simple planning rule many homeowners use is around 1% of the home’s value per year (it varies by location). Third-party county summaries often put Pierce County’s effective rate right around about 1%. On a $500,000 home, 1% is about $5,000 per year, or about $416.67 per month.
Here’s the “why this matters” part:
Homeowners insurance is also usually paid monthly through escrow. Rates have been under pressure across the country due to higher repair and rebuild costs, and Washington homeowners have been feeling it too. A national consumer report found typical homeowners premiums rose about 24% from 2021 to 2024. LendingTree’s analysis reported Washington home insurance rates increased 19.5% in 2024 (year-over-year). Washington regulators also created new rules starting June 1, 2024 that require clearer explanations when premiums rise, because rate increases have been a real consumer issue.
Turn insurance changes into monthly math:
Let’s use the exact loan math from earlier (same $400,000 loan). If your rate drops from 6.99% to 5.99%, you save $262.89 per month on Principal + Interest. Now add real-life increases: if property taxes go up $100 per month and insurance goes up $50 per month, that’s $150 per month added back, so your net savings is only about $112.89 per month. If property taxes go up $200 per month and insurance goes up $100 per month, that’s $300 per month added back, which is more than the $262.89 you saved from the rate drop. In that case, your total monthly payment actually goes up about $37.11 per month, even though the interest rate went down.
Clean summary using the exact numbers:
Don’t shop a rate. Shop the full monthly payment. When we help clients look at homes for sale in Bonney Lake, Lake Tapps, Sumner, Auburn, Milton, and Edgewood, we build the payment with three parts: the loan payment, taxes for that specific address area, and a realistic insurance estimate (not a guess from five years ago). National averages are helpful for headlines, but your budget needs address-level numbers. Freddie Mac’s weekly average can tell you where the market is, but your escrow line items decide how your payment feels.
Practical takeaway: if you’re waiting to buy “until rates drop,” also plan for taxes and insurance to move. A small rate win can still be a win, but only if you’re doing the full math.
Soft CTA: If you want us to run the exact payment math for your situation (price, down payment, credit, and the specific neighborhood), reach out at www.onsiteregroup.com or call André & Cindie at 253-441-9764.
