It might be good to show how the monthly repayment (MR) for $100,000 loan increases with rising loan interest rate (LIR). As shown in Figure 1, all the three curves are approximately straight lines.
For 10-year loan term, MR ~ 45 × LIR + 830.
For 20-year loan term, MR ~ 48 × LIR + 411.
For 30-year loan term, MR ~ 51 × LIR + 270.
The estimate of the effect of an interest rate hike say Δi is simply given by ΔMR ~ 45×Δi, 48×Δi and 51×Δi respectively for a 10, 20 and 30-year loan term. Thus, a 0.25% increase in the loan rate will cause an increase in monthly repayment of ~ $11.25, $12 and $12.75 respectively for a 10, 20 and 30-year loan term.
Sometimes, we also heard about paying double the purchase price of our home over 30 years or something. Yes, it is more likely so when the loan term is long like 30 years and with loan interest rate greater than 4.5% (as shown in Figure 2). Figure 2 also shows that 30-year loan term is much more sensitive to rising loan interest rate (which is as expected). I hope by equipping with these data and approximations, we are able to make informed decisions on our debts.
Figure 1: Monthly Repayment for $100,000 Loan.
Figure 2: Total Repayment for $100,000 Loan.
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