How much would a $450,000 per month mortgage cost?

Home buyers are waiting mortgage interest rates to finally fall, it may not take very long.

After hitting their highest point since 2000 Last summer, mortgage rates fell by more than a percentage point since then. And now they’re about to fall even further. With a steady cooling inflation rate and a slight increase unemploymentThe US Federal Reserve is expected to make its first rate cut in four years. Mortgage interest rates could then also see a further decline.

Understanding these changing dynamics is critical for home buyers entering the market right now. However, there are steps to follow before making an offer on a home, with budget calculation at the top of the list. With the average price of a house With a mortgage currently sitting at around $427,000, many buyers may be wondering how much a $450,000 loan could cost them each month. Below, we’ll calculate those potential costs right now — and what they could look like once interest rates drop.

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How much would a $450,000 per month mortgage cost?

The following calculations do not take into account homeowners insurance, state and local taxes and Private Mortgage Insurance (PMI)all of which can vary greatly depending on your specific borrower profile. Here’s what the principal and interest payments would be on a $450,000 mortgage, assuming you use the traditional 20% down payment ($90,000):

• 15-year mortgage at 5.86%: $3,010.72 per month
• 30-year mortgage at 6.44%: $2,261.26 per month

And while mortgage rates likely won’t drop directly in tandem with the federal funds rate, here’s what borrowers could expect to pay with a 25 basis point reduction:

• 15-year mortgage at 5.61%: $2,962.56 per month
• 30-year mortgage at 6.19%: $2,202.55 per month

And here’s what they could pay if current rates were cut by half a percentage point:

• 15-year mortgage at 5.36%: $2,914.82 per month
• 30-year mortgage at 5.94%: $2,144.51 per month

So not only are mortgage payments on a $450,000 mortgage affordable in September, they are likely to get cheaper as the year goes on, making it now the best time to buy a house in several years.

Learn more about your current mortgage rate options online now.

Don’t forget other costs

While the above figures take into account the principal and interest you would pay on a $450,000 mortgage, minus the down payment, these figures alone do not represent your total monthly payment to your lender. Homeowners insurance can be paid up front each year or added to your mortgage and paid for by the lender, which could increase your monthly costs significantly. Taxes can also increase this payment, especially when local assessments are done. So be sure to ask the seller what they are currently paying for insurance (including coverage amounts) and taxes now to better determine exactly what your potential mortgage payment will be in the future.

The essentials

A $450,000 mortgage payment could cost eligible borrowers between $2,261.26 and $3,010.72 per month, depending on the loan term chosen. But that figure doesn’t take into account future interest rate cuts, which could result in lower payments. But it also doesn’t take into account insurance and tax costs, which could result in higher payments. So be sure to do your research and calculate all potential expenses before agreeing to borrow that much from a lender.

Start calculating your potential home loan costs here.