Home / Mortgage payment / At 5 percent
Mortgage Payment at 5 Percent
What does a rate of 5 percent do to a $300,000 mortgage? This page sets it as the starting rate so you can see. It is a what-if figure and not a quote.
At 5 percent the monthly payment on the starting loan is $1,610.46. Total interest over the term is $279,767.
How the payment is worked out
Start by turning the yearly rate into a monthly one. 5 percent a year is 0.4167 percent a month. Next count the payments, which is 360 for 30 years. The payment is then the loan of $300,000 times the monthly rate, divided by one minus one over the growth factor. The growth factor is one plus the monthly rate multiplied by itself 360 times.
Worked example
A $300,000 loan at 5 percent over 30 years costs $1,610.46 a month. Interest takes $1,250.00 of the first payment.
Each point matters. At 4 percent the total interest is $215,609. At 6 percent it is $347,515. The page rate of 5 percent sits between at $279,767.
Questions about this calculator
Would an extra $100 a month help at 5 percent?
It would end the loan 3 years 8 months sooner and save $39,937 of interest on the example loan.
How does a half point change the payment on $300,000 at 5 percent?
A half point higher raises the payment to $1,703.37. A half point lower reduces it to $1,520.06.
Is a lower rate than 5 percent always better?
Not if it comes with fees or points. A rate one point lower saves $178.22 a month here. Divide the upfront cost by that saving to see how many months it takes to break even.
How much would one point more than 5 percent cost each month?
Moving to 6 percent adds $188.19 a month and $67,747 of interest over the loan.
Related calculators
This page is for education only and is not financial or tax advice.