Why an $800k Loan Gets a Worse Interest Rate

The Sell for 1 Percent team unpacks the current Central Ohio market, where mortgage rates are holding steady in the 6-7% range. It turns out that getting a larger loan of $800,000 can actually result in a higher interest rate than a smaller $150,000 loan—a counterintuitive government policy mortgage lenders describe as ‘robbing from Peter to pay Paul’ to incentivize lower-end buyers. With about 50% of Columbus metro listings seeing price drops and a median market time of 35 days, local sellers need to price correctly from the start to attract today’s picky but active buyers.

#SellFor1Percent #ColumbusRealEstate #MortgageRates #HomeBuying #OhioRealEstate

Full Transcript

Hello, folks. Jaime with Sell for 1 Percent Realtors. It is August 5th, as time flies by, 2026.

We are here to discuss the Ohio market, more specifically Central Ohio. I have Rich Cercone with Highlands Mortgage joined with us here today. They still haven’t given you a shirt.

No shirt. Oh, boy. I need to close more loans.

Look at that. Actually, you can buy a shirt. I’m forced to wear this shirt.

I was going to wear a t-shirt, but I get yelled at by dad. Here you go. At least you got a haircut.

Looking good. Let’s see the side. Let’s see the side.

Now, I’m very… Now, I got forced to get this haircut, too. Did you go with Jackson? That is a dictator.

No, Jack’s still rocking his summer haircut. He still has Mohawk going. Does he have to get that buzz before he goes to school? Yes, and it’s coming up here in about 10 days.

School? Haircut. August? August 20th is when they go back. Okay.

Yep. He’s going to get a little trim, his Mohawk. Mohawk’s going away.

Look like his old man. You’re living through his little life, being able to sport a Mohawk. When I had a Mohawk, dad threw me out of the house.

That’s a true story. That is true. Dad’s always had issues with my hair.

He won’t let me live. Oh, he’s jealous of your hair. No, if I had hair like his, I would have it styled like that as well.

Not just let it run rampant and then put girly bands in my hair to pull it back. Jaysen, I’ve always liked your hair, but I think that haircut looks really nice. It does.

Very nice. Thank you. I’ll cut out my boy Muhammad over at Dapper’s.

It’s a new barber shop. Did a good job. You look tight.

Yes, he did. I might go visit him. Dapper’s in Hilliard? Yep.

Cemetery Road. Twenty bucks, good haircut. Yeah, that’s not bad.

Do you need an appointment? I made an appointment. They had availability. That was nice.

Here’s my biggest complaint. I could go to Dapper’s. They only have to do about half the work, and they’re still going to charge me the full price.

I walked in with all my hair, and I told him I want a one on the side and fade it up to a three. He was like, are you sure? That’s pretty short. He said, why are you cutting it off? I said, my wife.

Well, that happens. That happens. You’ve got to make sure the lovely is taken care of.

Why don’t we get this back on track a little bit here? Yeah, why don’t you get us on track there, GM Aronski? You’re not sporting your Ray-Bans anymore. I wear my Ray-Bans. I wear them all the time for phone calls.

Do you have them handy? Uh, no. I would think with that haircut, with those Ray-Bans, it would be super sharp. Jane does not like the Ray-Bans.

That’s because you’re recording. She doesn’t want you to be recording. They’re a little bulky.

I haven’t gotten that technology down pat just yet, but it’s coming. It does remind me that I wanted to get those in sunglasses, too. I think they make them in the photosensitive glass now.

They’re like twice as much, but you can get them in prescription or with the photosynthesis or whatever. What does that mean? Photosynthetic plants? How they eat? Are you talking about transition lenses? Transition. No, I don’t want those.

Oh, boy. That’s some Boomer Core stuff. Speaking of which, Rich, what do you got for us on interest rates? It’s so ridiculous.

Nice transition, yeah. Well, it’s not quite as interesting as haircuts, but Cousin Kevin, let’s call him Cousin Kevin instead of Uncle Jerry. Cousin Kevin, he does not like inflation over 2% from what I read.

And the markets are convinced that there’s a high likelihood we’re going to see a rate increase somewhere in the future. They’re saying 58 to 61 percent in September. And it continues to be a bias towards tightening in the coming months beyond that in 2026.

So mortgage rates are always looking at the future and what the future brings. And right now, the future is probably the bias towards tightening. And when you see something like that, you’re not going to see lower interest rates.

So the 10-year bond, because of the war, being in a better place right now. And I do use right now because who knows what tomorrow brings. Or next hour.

Or next hour. But the 10-year treasury is off of its highs. It was in the 470s.

It’s in the 460s now. So we’ve got a little bit of relief there. Mortgage rates got a little bit better based on that.

But we’re still in the 6-7 range, basically, on mortgage rates. 6-7. Yeah.

Me and Jack’s favorite 6-7. 6-7, yeah. There you go.

Are you seeing anything pop above 7? If you have enough of a negative scenario, when I say negative, what the markets don’t like, what Fannie and Freddie don’t like. I mean, it’s not unusual to see a rate that might be 7% if your credit score is not ideal, if your loan-to-value is not right, and if you have a high enough loan amount. Because the higher your loan amount, the higher your rate.

The lower your loan amount, the lower your rate. The exact same customer with the same loan-to-value and the same credit score with a $150,000 loan might be 6.5%. And if he’s buying a house with an $800,000 loan, he could easily be 6-7, 6-8, or maybe even 7%.

The higher price mortgages are a higher rate. And I don’t really know why. I think it’s that they see the larger amount being more of a risk, that that higher end of the market could fall first.

I really don’t have an explanation for it, but that is how it’s working right now. And this is something that’s new in the past couple of years, the higher loan amount being a higher rate. Yeah, it would seem like that someone that could afford an $800,000 home, or at least not necessarily afford it, but they can get a loan for it, that the more you took out in a loan, like anything else you buy in bulk, that you get a little better interest rate.

Right. You’re saying the opposite. The opposite is definitely true.

I know it’s counterintuitive, but yeah, they do not like the higher loan amounts, and you’re not going to get the preferred rate with an $800,000 loan, as opposed to a $150,000 loan. I imagine that’s probably nationwide. It’s nationwide.

Maybe the sharp increase here recently in equity and what’s going on in the Sun Belt being a little bit slower maybe has something to do with that, but that’s just a theory. It’s somewhat political, too, in the fact that they’re trying to help the people who maybe are at the lower end of the economic spectrum, but by that same token, I can point to I don’t know how many people that are my age, the baby boomers, who are buying a $1.1 million empty nest stand-alone condo and putting a million dollars down and financing $100,000. Right.

So they’re getting a preferred rate, even though the guideline is meant to incentivize the lower-income people. So none of it makes sense. It’s our government.

What can you say? I can remember talking about this even a couple of years ago that the people who really don’t need the loan are getting charged a higher rate, while the people who really do need the loan are getting a better rate. So I would have to think that’s some sort of government guideline somewhere that is creating that scenario. I remember when they came out with that, that grid.

Yeah. Right. Yeah.

That’s a couple of years ago, right? Maybe longer? Yeah. It’s just like we talked about then what you just said. It’s contrarian to what you would think.

But they’ve always— I mean, it’s what created the housing crisis back in 2008 that let’s make sure that we give everybody a loan that can’t afford the loan and give them preferential treatment. Actually, back then they were forcing banks that you either give these loans or we’re going to cut you off. And then it created a problem.

And they’re sort of forcing banks to give a better rate to the lower income— or not the lower income, the lower loan amounts, which they feel are the lower income people, but not necessarily as I pointed out with the baby boomers. And, yeah, that’s definitely the case. They are forcing— I’ve talked to several mortgage servicers, hey, what’s going on with these rates? And they’re like, hey, we’re robbing from Peter to pay Paul.

We’re robbing from the higher loan amount to give a better rate to the lower loan amount people. And it’s all government coercion, basically, is what’s going on there. All right.

Well, we’re not here next week. We’ll know why. Yeah.

You know, there’s nothing we can all do about it. And I think that, in general, I don’t want to be insensitive, but people worry too much about, is my rate 6.7 or 6.8? Right. I agree with that.

I was talking to somebody the other day, and my rate was 6.625, lower loan amount again. And so it wasn’t a big loan anyway. And then they had a better rate of 6.5, but they had to put an extra $15,000 down to get that rate.

And I said, it’s a rounding error. Why not keep your cash and take a slightly higher rate than take $15,000 more out of the bank? But that isn’t the way that they saw it. Well, it becomes a math problem.

Yeah, exactly. I mean, like that quarter point, what’s that going to cost you monthly on a half million bucks? What’s it, $50 a month? Right. And so I’m going to come out of pocket $15,000 to save $50 a month or $600 over the next year or $6,000 over the next 10 years or $12,000 over the next 20 years.

But I could have kept the $15,000 in my pocket and invested it into the market. Yeah. And make that much money back.

And it’s not even $50 a month. It would depend on the loan amount. But, you know, it’s even much less than that sometimes.

Yeah, yeah. Because, I mean, it depends on per thousand, like you say, all this other stuff. And I can tell you that, you know, in talking to people, you know, people will call me.

They want to refi. And I’ll say, okay, what’s your rate? And I’ll tell you that I talked to 100 people and I asked them, what is your current rate? And most of those people, like 90, I’d say 90% of the people will say, I don’t know. It’s like 6.7, 6.5.

I don’t remember exactly what it is. So after you close, you don’t even remember what your rate is, but it’s so important to you when you are, you know, when you are buying a house. So, you know, that’s just something that I’ve noticed quite a bit through the years working with people is some of that stuff seems consequential to you once you’re in a house.

Same thing is if I asked, if I thought, if I thought about it, I don’t remember how much I paid for my house. Did I pay 4.70 or 4.65? You know, I don’t remember. So, you know, that little bit of extra just to get the house you want, the extra $5,000 offer, you won’t even remember it a few years from now.

I think the best analogy for me is that I’ll drive an extra 20 minutes to save 3 cents on a gallon of gas. We know all about your gas, your rationality. It’s the same concept.

I get on my Speedway app or I get on Gas Buddy or whatever and I see, oh, you know, it’s just 15 minutes over there and I’m going to save 4 cents a gallon. And so when you, when you do the calculation, I got a 21 gallon tank, so I saved a buck 60, but I spent an extra half hour or maybe, you know, $50, $60 of my time driving over there to save a buck 60. And then you don’t want to have your wife in the car because that’s extra weight you’ll burn.

So you make her wait at home while you go get the gas and then you have to drive all the way back home and pick her up again. The interesting thing is there’s so many gas stations out there that it’s awful hard to, you know, run out of gas anymore. And I haven’t in a long, long time.

But, you know, I still do. You run out of gas more than anyone I ever met in my entire life. Three-quarter tank rule, you know, because it cuts into your fuel mileage.

So, and then I do have the extra large gas tank. I haven’t gotten to the point where I’m putting the 55 gallon tank in the trunk so that I can go even further. You guys see those dualies out there, those farm trucks, and they got the big gas tank on the back end.

It’s like, well, they can also pump that right into their own gas tank. I mean, they’re using it for their tractors and whatnot. But, you know, you could go probably drive across the country and never have to stop at a gas station.

That’s my goal. I enjoy the convenience of the sheets nearby, and I’ll pay the extra. But I almost yearn for the complaint.

Yesterday I filled up. It was $5.20 for premium. I couldn’t believe it.

Well, you got three gas stations right there. I thought somehow this is Joe Biden’s administration’s fault. That’s what I thought.

You have Speedway, Sheetz, and Marathon all there together. And normally Speedway’s got the cheaper gas, usually by a penny or two, than Sheetz. And the Marathon, I don’t know how those guys stay in business because they’re always.

It’s got to be a front, yeah. Yeah. I don’t get it either.

High quality gas. Oh, you know what? I do know how. My buddy, Alan, he was doing Marathon is his top tier.

Yeah. I might stop by there from now on. My buddy, Alan, said he was at the Marathon there, and I was just like.

I thought about it, and I called him later. I’m like, why did you go to the Marathon? It’s like I was on the side of the street I was on. It’s like, all right.

Well, that’s how they stay in business. That’s true. You got a red light there, and four lanes turning every which direction.

So yeah, the Marathon, I don’t want to have to turn left to get gas. I did that one time with you in the van, and I ran out of gas. And then I said, well, I was going to get gas anyway, so I went into the Speedway, crossed over the road, went into the Speedway, got a gas can, got a gallon of gas, came back.

Jaime’s sitting in the van with his shirt wrapped around his head. I was like, what’s going on? He goes, I’m dying in here. It’s so hot.

I said, well, just stroll down the window. He said, you took the keys. And I reached over.

It was an old hand crank one. I cranked down my window. Oh, boy.

My boy genius. Just think how many young people these days. Trusting to sell your real estate with.

The guy running out of gas, and the guy with his shirt around his head. I was young. I was young in roll windows.

I mean, maybe I was doing it just in case. You were in high school. There’s a whole generation of people that have never even seen a rolled down window, now that you think about it.

Yeah, lived a very soft life. He was always used to hitting the button. Back up.

I remember the first time I got an electric window worker. I felt like I really had arrived. Yeah, when you graduated from four on the floor to automatic to getting power steering.

Power steering, power brakes, power windows. That was all big time. What will they think of next? Oh, I don’t know.

Well, they got driverless cars now. I don’t even have to drive. I just jump in and off we go.

Yeah, problem with that is the range. I drive from Indian Lake to Lancaster to Ostrander and back down to Mount Sterling. It’s like this electric car, I’d have to stop three times and charge it.

It’s crazy. I think they’ll get to the point where AI decides whether your window can go down or not, whether you need it, if it’s warm enough. The other thing that’s interesting about those cars, you’re only supposed to charge the battery to about 80% so that you don’t ruin the battery.

The advertised range is not really the real range either. Now, if you have a big day, you can charge 100%, but you’re not supposed to do that every time. There you go.

All these things, if you’re thinking about buying an electric car, which I’m not. No, if you have any car in the world, I would drive what the terrorists in the Iraq war drove. I’d have some old Toyota you can bury.

Why can’t you drive that? I think those Helixes are illegal here now. I don’t know, but the idea being was that you got rid of all the electronics in your car so that when they try to do the e-bombs and stuff like that, your car just stops running. I’d like a 1985 Toyota Helix with a cannon mounted on the back of it driving through Columbus.

You’ll have a few questions to answer, sir. All right, well, let’s get back onto the real estate thing here. Jay, what are you seeing on your sell side? Are we up over 10,000 listings yet? 5,972.

Price decreases are about 50% in the metro, so half the listings are dropping price. Days on market, average is over 70. The median is still around 35, so you throw out the high and the low, you get that 35-day median.

What I tell sellers when they ask me, I had someone ask me yesterday, well, it’s better than what the headlines would lead you to believe. Really, the biggest thing killing us at the moment is this Iran war, conflict, whatever it is, that has caused interest rates to go up. I forget the lady’s name, Beth Hannock or something that’s on the Fed.

It seems the market reacts more to what she says than what Kevin Warsh is saying. The hawks seem to be in control of the Fed. I think it’s personal between this administration and the Fed.

They’re not going to do anything to help before midterms and in general. When gas prices are up, oh, it’s inflation. We’ve got to raise rates.

When gas prices come down, they say, oh, people are going to spend more money. That’s inflationary. We’ve got to raise rates.

No matter what happens, they want to raise rates. We went into this year, and I used to joke about it, that the NAR is this propaganda wing for real estate agents. Oh, we’re going to have three rate cuts.

It’s like, here we are. Luckily, if rates can get below 6.7, then I think we’ll keep chugging along. Demand is pretty strong.

I was hearing that new housing starts are almost in recession levels. I think the new builds are feeling it more than what we are on existing. The market chugs along.

What I tell sellers is, it’s really not all that bad. If you’re priced right, things are selling. We’re going to sell 30,000 plus homes in the Columbus metro.

Things are moving along. Buyers are being picky. I’ll let Jaime elaborate on that.

Buyers are picky right now. Buyers feel like, oh, it’s a buyer’s market. It’s not.

It may be more balanced and more healthy than what it was two years ago. Sellers still have the advantage. We’re still selling at record high prices.

When I started, Dad’s gimmick when he advertised on the radio was, I’ll sell your house in 90 days or less, guaranteed. The median is 35 days. It’s still a pretty good market for sellers if you can sell in a month.

A lot of people don’t have that perspective. It used to take 180 days to sell a house. Now they sell in a month.

If you’re priced right, things are okay. If you’re out over your skis, drop your price and it will sell. Sellers don’t usually like when I simplify it like that.

That’s the honest truth. Price is what sells everything. Whether it’s a house, whether it’s coffee, a car.

If you don’t sell it, you put it on sale and it will sell. If it doesn’t sell, it becomes buy one, get one. It becomes manager special, whatever, and it will go.

Price is king. Buyers are picky. That’s where I think sellers get it on both ends.

They have a lot of work to be done still at the house. They think anyone is going to put new carpet in and anyone is going to paint it. You’re going to get beat up on price.

You’re going to lose on the sale price and you’re going to lose on the home inspection. You’re going to get the double whammy versus doing the low hanging fruit items and getting it sold. That’s what I see.

Jay Marinski, do your buyers concur? I would say so. I would say fundamentally, like Jaysen is saying, fundamentally it’s still a seller’s market. The difference is it’s not a seller-controlled market.

I wouldn’t call it a seller-controlled market. We still have relatively low listing levels, but buyers have more options. I would almost call it a negotiation market.

Pricing is going to be the most important thing. Buyers can still negotiate closing costs. They can negotiate on remedies now.

I remember my neighbor sold in 2022 and sold in 48 hours and multiple offers. It’s not the same market. It’s fundamentally different.

Again, it’s still, I would say, a seller market, but it’s more shaded to a negotiation market where buyers have options. They can look at more houses, be a little bit more picky, and then negotiate. Much more of a, I would say, a balanced market.

Ultimately, the marketing side isn’t as important as the pricing side. If you’re, like Jay said, out over your skis on price, buyers are going to pick up on that. They have more time to look at comps.

They have more time to decide what kind of updates and whatnot they have. I would say on the buyer side, it’s a negotiation market. You can get things done.

You can get a bunch of remedies taken care of. You can get closing costs on certain homes. You’re saving a lot of out-of-pocket expenses as a buyer, but there is more options.

That would be my key for the day, a negotiation market for your buyers. I think what I’m seeing is if a house is priced correctly for what it is, it’s still going to sell within that first 7-10 days it’s on the market. In some cases, if it’s, and I use the term, the pottery barn home, where you walk in and everything is just where it needs to be.

It’s clean, it’s fresh, it has the updates, upgrades, whatever it may be. That house is very likely going to get multiple offers. I think buyers are taking their time.

They’re not rushing into things just to buy. They are looking more for the perfect situation. When the right house comes on the market, and again, if it’s priced correctly.

I just had one over on Tuswell in Dublin. It was priced for what it was. A very nice home, but missing a couple of updates.

We had three offers on it the first weekend. Then you put another one on the market, and it’s a little overpriced. It doesn’t have the updates, and it sits for 75, 80, 90 days until you start moving price down.

The caveat being, I think that if you’re looking at putting a house on the market, the better position is going to be for the house to be updated and or priced for what it really is. You’ll attract the right buyers. Anywho, Rich, any last words of wisdom? You look like you’re on fire.

Find a house that you really like, and trust your realtor that you’re paying a good price. Live in that thing and enjoy it for the next 10 or 15 years. Yeah.

You had the grandkids in for two weeks or three weeks? It wasn’t so much the grandkids. It was more the sister, brother, sister-in-law, brother-in-law. One of my daughters was in, but not the one that has children.

There were waves of this happening over the last three weeks or so, but it’s over now. Get back to your normal life. It was funny.

Usually, there’s not much going on here. My brother says he’s coming to help my sister who’s moving. My sister says, well, I’m moving, so I have to pack my house up.

I’m going to have to stay with you. My sister-in-law is buying my sister’s house, so she’s coming to town. At the same time, my daughter calls me and says she’s coming.

This is all happening in the same week and a half period, basically. That’s fun. It was a nice household for a while there.

There you go. Activity. All right, guys.

Well, I appreciate you all. Good information. Who’s going to take us home? Thanks for having me.

I like Jaysen’s wrap-up, but I can do it. I hear this every week from Jaime. If you need to buy a house, give Jay Marunsky a call.

Tell him to keep his shirt on his body and not over his head. If you need to get a loan or refi, call Rich at Highlands Mortgage. Even though he has no shirt, he will get it done.

If you need to complain about me, call Dave. He’ll be there ready, willing, and able to make me cut my hair and wear company shirts and tow the company line. I gave up on all that a long time ago.

Yep, I sold my soul to the company store, as Grandpa Ron would say. There you go. If you need to sell a house, give me a call.

I’m your guy. We’ll get it sold for top dollar, all for a 1% commission. Thanks for watching.

Like and subscribe. If you’re listening on the podcast somewhere, leave us a five-star review. It helps people find the podcast.

Any comments, questions, drop them below. Thanks for watching or listening, guys. Take care.

If you need a haircut, call McCormick. Yep. Dappers and Hilliard.