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Mortgage Payment at 8.5 Percent
What does a rate of 8.5 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 8.5 percent the monthly payment on the starting loan is $2,306.74. Total interest over the term is $530,427.
How the payment is worked out
The monthly payment comes from one formula. Multiply the loan by the monthly rate, then divide by one minus the following number: one plus the monthly rate, raised to the negative of the number of payments. For $300,000 at 8.5 percent over 30 years, the monthly rate is 0.7083 percent and there are 360 payments.
Worked example
At 8.5 percent a $300,000 loan over 30 years costs $2,306.74 a month. The first month includes $2,125.00 of interest.
A rate one point higher, 9.5 percent, would cost $2,522.56 a month. A rate one point lower, 7.5 percent, would cost $2,097.64.
Questions about this calculator
How much would one point more than 8.5 percent cost each month?
Moving to 9.5 percent adds $215.82 a month and $77,696 of interest over the loan.
What would one point less than 8.5 percent save?
Moving to 7.5 percent lowers the payment by $209.10 a month and saves $75,275 of interest.
Would an extra $100 a month help at 8.5 percent?
It would end the loan 4 years 8 months sooner and save $99,016 of interest on the example loan.
How does a half point change the payment on $300,000 at 8.5 percent?
A half point higher raises the payment to $2,413.87. A half point lower reduces it to $2,201.29.
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This page is for education only and is not financial or tax advice.