No matter the state of the housing market, buying a house is an expensive endeavor. Unless you’ve got a few hundred thousand dollars lying around and plan on buying a house in cash, you’ll probably need to take out a mortgage to make this purchase. But how much will that cost you when all is said and done?
In this Redfin article, we’ll break down how much a mortgage on a $300,000 house costs, both on a monthly basis and in the long run. Whether you take out a 30-year mortgage on a house in Houston or a 15-year mortgage on a home in Louisville, find out how much you’ll likely end up paying.
How much is the monthly mortgage payment on a $300K house?
Your monthly mortgage payment is more than just repaying the loan—it includes several costs that can vary based on where you live and the type of mortgage you choose. While principal and interest make up the bulk of your payment, additional expenses like property taxes and homeowners insurance can significantly impact your total monthly cost.
Here’s what’s typically included in your mortgage payment:
- Principal and interest: The amount borrowed and the interest charged by your lender
- Property taxes: Set by your local government and vary based on location
- Homeowners insurance: Protects your home against damage and liability
- Private mortgage insurance (PMI): Required if your down payment is less than 20%
The exact amount you’ll pay each month depends on your interest rate, loan type, and down payment size. Below, we’ll break down estimated mortgage payments for a $300,000 home based on different down payment amounts.
Example monthly payments for a $300K home (30-year loan at 6.5% interest)
|
Down payment |
Loan amount | Monthly payment (principal + interest) | Estimated total payment (including taxes + insurance) |
|
20% ($60K) |
$240,000 | $1,500 | $1,950 |
| 10% ($30K) | $270,000 | $1,700 |
$2,300 |
| 5% ($15K) | $285,000 | $1,800 |
$2,412 |
Property taxes and insurance vary by location, so actual costs may differ.
How interest rates affect your mortgage payment
Interest rates have a major impact on your mortgage payment. Even a small rate increase can add thousands to the total cost of your loan.
Example: monthly payment at different interest rates
For a 30-year loan with a $240K loan amount, here’s how your interest rate affects total costs:
|
Interest rate |
Monthly payment (P&I) | Total interest paid over 30 years |
|
6% |
$1,438 | $277,765 |
|
6.5% |
$1,500 |
$306,000 |
| 7% | $1,600 |
$335,894 |
| 8% | $1,764 |
$395,652 |
A 1% increase in interest (from 6.5% to 7.5%) could cost you over $60,000 more in interest over the life of the loan. A higher credit score and a larger down payment can help you secure a lower rate, reducing your total costs.
How loan type affects your mortgage payment
The type of mortgage you choose impacts your monthly payment and total interest paid over time. A 30-year mortgage offers the lowest monthly payment but costs more in interest over time. A 15-year mortgage requires higher payments but saves money long-term. An ARM starts with lower payments, but rates can rise after the fixed period.
Here’s how the most common options compare:
|
Loan type |
Monthly payment (P&I) | Pros | Cons |
|
30-year fixed |
~$1,500 (with 20% down) | Lower monthly payments, easier to qualify for | Higher total interest, slower equity build |
| 15-year fixed | ~$2,100 (with 20% down) | Pay off home faster, less total interest |
Higher monthly payments, harder to qualify |
| Adjustable-rate (ARM) | ~$1,500 (initial) | Lower initial payments, good for short-term buyers |
Rates can increase, unpredictable costs |
How much should you put down on a $300K house?
Your down payment impacts your loan amount, monthly payment, and whether you’ll need private mortgage insurance (PMI). A higher down payment reduces your loan size, lowers your interest costs, and eliminates PMI if you put down at least 20%.
Common down payment options
- 20% down ($60K) – No PMI, lower monthly payments, and less interest paid over time
- 10% down ($30K) – PMI required, moderate monthly payment
- 5% down ($15K) – PMI required, highest monthly payment, and more interest paid
If you can’t afford 20% down, many lenders offer low-down-payment loan options. FHA loans require as little as 3.5% down, and VA or USDA loans may allow 0% down for eligible buyers.
A larger down payment means lower monthly payments and saves thousands in interest over the life of the loan. However, putting down less can help you buy a home sooner if saving for a large down payment isn’t feasible.
Income needed for a $300K home (30-year loan at 6.5% interest)
Before buying a home, it’s important to determine how much you can afford based on your income and expenses. Lenders often use the 28/36 rule to assess affordability—this guideline suggests that your monthly housing costs should not exceed 28% of your gross income, while total debt payments (including loans and credit cards) should stay under 36%.
Below is a breakdown of the income typically needed to afford a $300,000 home.
|
Gross monthly income |
Affordable mortgage payment | Can afford a $300K home? |
|
$5,500 ($66K/year) |
~$1,540 | No |
| $6,900 ($83K/year) | ~$1,932 |
Yes |
| $7,500 ($90K/year) | ~$2,100 |
Yes (more comfortably) |
If your income is below this range, you may still qualify by:
- Making a larger down payment to reduce your loan amount
- Improving your credit score to get a lower interest rate
- Reducing other debts to improve your debt-to-income ratio
A higher down payment or lower interest rate can help make a $300K home more affordable.
Final thoughts
Your mortgage payment on a $300,000 home depends on interest rates, loan type, and down payment size. A higher down payment and lower interest rate can save you hundreds per month and tens of thousands over time.
Before buying, consider:
- How much you can afford based on your income and debts
- Current interest rates and how they impact payments
- The best loan type for your budget and financial goals
Ready to buy a home? Use Redfin’s mortgage calculator to get a personalized estimate.
The post How Much is a Mortgage on a $300,000 House? appeared first on Redfin | Real Estate Tips for Home Buying, Selling & More.
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