How can interest rate change my payment?

Mortgage rates are very low, home prices are down and the $8000/$6500 tax credit remains an attractive benefit for purchasing before the end of April.

On a $300,000 mortgage, just a 1% rise in the rate from 5% to 6% increases the payment by $188.19/month. That difference is enough to cover most homes’ PUD bill for the month, the car payment on a $10,000 loan, or 59 decaf tall mochas at Starbucks.