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Rising Monthly Debt Payments: How O1ne Mortgage Can Help
If you’re like most borrowers, your monthly loan and credit card payments have increased, even from a few months ago. According to Experian data, as of February 2024, the average amount consumers needed to repay all of their monthly debt obligations climbed to $1,225. This increase is driven by a combination of inflation, rising interest rates, and other factors specific to each type of loan.
Balances and Monthly Debt Payments Are Rising in Tandem
Experian’s consumer debt review revealed that average balances are increasing for virtually every type of consumer debt. Naturally, this means that monthly debt payments have also increased. Since 2020, the average car loan payment has grown by more than $100 to $644, average monthly credit card payments have increased by $50 to $202, and average monthly mortgage payments have increased by $370 to nearly $2,000.
Average Monthly Debt Payment
| Year | Auto Loans | Credit Cards | Mortgages | All Monthly Payments |
|---|---|---|---|---|
| 2020 | $535 | $152 | $1,620 | $1,047 |
| 2021 | $555 | $151 | $1,657 | $1,051 |
| 2022 | $588 | $172 | $1,778 | $1,113 |
| 2023 | $630 | $197 | $1,934 | $1,197 |
| 2024 (February) | $644 | $202 | $1,990 | $1,225 |
Consumers with newer car loans and mortgages are more likely to have above-average monthly loan payments, while those with loans originated before 2021 are more likely to pay less than the current monthly average. Higher purchase prices and higher interest rates have resulted in higher-than-average monthly payments for more recent borrowers.
Average Monthly Payments Are Higher in Tech-Driven States
Tech-heavy states such as Colorado, Washington, D.C., Washington state, Maryland, and Virginia have monthly debt payments of at least $1,400, well above the $1,197 national average. This is likely due to higher real estate prices and higher incomes relative to the rest of the nation. Meanwhile, the average total monthly payment is under $1,000 in only a handful of Midwestern states and Mississippi.
Student Loans, Rent, and Other Monthly Payments Are Also Squeezing Consumers
For younger consumers, additional financial pressure comes from monthly obligations such as student loans, rent, and utilities. This growing stack of monthly payments may be beginning to slow consumer spending. Without an increase in income, U.S. consumers will have less for future consumer spending.
Interest rate cuts, expected sometime in 2024, may not immediately result in relief for most consumers. However, lower rates may help consumers with good credit negotiate better rates on financing or refinancing loans.
How O1ne Mortgage Can Help
At O1ne Mortgage, we understand the challenges that rising monthly debt payments can bring. Our team of experts is here to help you navigate the complexities of mortgage financing. Whether you’re looking to purchase a new home, refinance your existing mortgage, or explore other financing options, we are here to assist you every step of the way.
Contact O1ne Mortgage today at 213-732-3074 for personalized mortgage advice and solutions tailored to your needs. Our goal is to help you achieve financial stability and peace of mind.
Conclusion
As monthly debt payments continue to rise, it’s essential to stay informed and proactive about managing your finances. By understanding the factors driving these increases and seeking expert advice from O1ne Mortgage, you can make informed decisions that benefit your financial future. Don’t hesitate to reach out to us at 213-732-3074 for any mortgage service needs. We’re here to help you every step of the way.
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