Repayments on a $500,000 mortgage - Mortgage Choice (2024)

FAQs

How much would you pay monthly on a $500,000 mortgage? ›

As noted above, your estimated monthly payment for a $500K mortgage will be $3,360.16, assuming a 30-year loan term and an interest rate of 7.1%. But this payment could range between $2,600 and $4,900 depending on your term and interest rate.

Compare Repayments on $500,000 Mortgages

A 30 year mortgage at 2.32% should cost you $1,929 principal and interest repayments per month, with $194,387 in total interest. A 30 year mortgage at 2.66% should cost you $2,017 principal and interest repayments per month, with $226,281 in total interest.

In today's climate, the income required to purchase a $500,000 home varies greatly based on personal finances, down payment amount, and interest rate. However, assuming a market rate of 7% and a 10% down payment, your household income would need to be about $128,000 to afford a $500,000 home.

Conforming Loan Down Payment – $500k House

Conforming loan down payments can vary from 3% to 20% or more, so for a $500,000 home, you'd need between $15,000 and $100,000. Conforming loans, once again, follow Fannie Mae and Freddie Mac guidelines and usually offer competitive terms.

The good news: With the U.S. Federal Reserve widely expected to begin cutting its benchmark interest rate in 2024, mortgage rates could drop as well—at least slightly. But that doesn't necessarily mean a return to the pre-pandemic era of more affordable mortgages and home prices.

Increasing your monthly payments, making bi-weekly payments, and making extra principal payments can help accelerate mortgage payoff. Cutting expenses, increasing income, and using windfalls to make lump sum payments can help pay off the mortgage faster.

The world according to TikTok is a weird and wonderful place, but it's no substitute for qualified financial advice. On our $500,000 mortgage above, paying an extra $1 a day will only reduce your repayment period to 19 years and nine months, saving you about $5,470 in interest.

Key features. The Standard Variable Rate (Wealth Package) is a packaged home loan offer from the Commonwealth Bank which is available to both owner occupiers and investors who are looking to borrow at least $150,000.

The 30% rule for home buyers

If your annual salary is $100,000, the 30% rule means you should spend around $2,500 per month on your house payment. With a 10% down payment and a 6% fixed interest rate, you could likely afford a home worth around $350,000 to $400,000 (depending on the cost of taxes and home insurance).

What credit score is needed to buy a $500,000 house? ›

Expect most mortgage lenders to want minimum credit scores of 620 or even 640.

As a rule of thumb, personal finance experts often recommend adhering to the 28/36 rule, which suggests spending no more than 28% of your gross household income on housing. For someone earning $70,000 a year, or about $5,800 a month, this means a housing expense of up to $1,624.

Monthly payments on a $500,000 mortgage by interest rate

At a 7.00% fixed interest rate, your monthly mortgage payment on a 30-year mortgage might total $3,327 a month, while a 15-year might cost $4,494 a month.

One rule of thumb is to aim for a home that costs about two-and-a-half times your gross annual salary. If you have significant credit card debt or other financial obligations like alimony or even an expensive hobby, then you may need to set your sights lower.

Monthly payments on a $500,000 mortgage

At a 5.0% fixed interest rate, your monthly mortgage payment on a 25-year mortgage might total $2,908.02 a month, while a 15-year might cost approximately $3,940.62 a month.

If you're thinking of applying for a $600K mortgage, here's the bottom line: The monthly payment on this mortgage at a 7% annual percentage rate (APR) for 30 years works out to be $3,991.81. If you would rather finance with a 15-year mortgage, the monthly payment would be $5,392.97.

How much are monthly payments on a $550K house? According to Bankrate's mortgage calculator, assuming you bring a 20 percent down payment to the table and take out a 30-year loan at a 7 percent interest rate, your monthly principal and interest payments on a $550K home will be $2,927.

To afford a $400,000 home, assuming a 20% down payment and a 6.5% interest rate on a 30-year mortgage, you would need a gross monthly income of approximately $7,786.55. This assumes you have $1,000 in monthly debt.