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Mortgage Payment at 6 Percent
This page sets the mortgage rate to 6 percent as a starting point. It is a preset for testing and not a quote. Replace it with the rate on your own offer.
At 6 percent the monthly payment on the starting loan is $1,798.65. Total interest over the term is $347,515.
How the payment is worked out
The standard loan formula has three inputs: the amount of $300,000, the monthly rate of 0.5 percent and 360 payments. Multiply the amount by the rate. Then divide the result by one minus one over the growth factor, which is one plus the monthly rate raised to the power of 360.
Worked example
At 6 percent the monthly cost of $300,000 is $1,798.65. The first month's interest is $1,500.00.
Shift the rate to 7 percent and the payment is $1,995.91. Shift it to 5 percent and the payment is $1,610.46. Interest over the loan is $418,527 against $279,767.
Questions about this calculator
Is a lower rate than 6 percent always better?
Not if it comes with fees or points. A rate one point lower saves $188.19 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 6 percent cost each month?
Moving to 7 percent adds $197.26 a month and $71,012 of interest over the loan.
What would one point less than 6 percent save?
Moving to 5 percent lowers the payment by $188.19 a month and saves $67,747 of interest.
Would an extra $100 a month help at 6 percent?
It would end the loan 3 years 11 months sooner and save $53,346 of interest on the example loan.
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This page is for education only and is not financial or tax advice.