What Is the Monthly Payment on a $200,000 Mortgage? (And Why the Rate Matters More Than the Price)

Two buyers purchase the same $200,000 home. One pays about $1,199 a month, the other pays $1,520. Same house, same loan - the only difference is the interest rate. This is the maths every buyer should do before viewing a single property.

The payment at common rates

On a 30 year mortgage of $200,000: at 5% the payment is about $1,074 a month, at 6.5% about $1,264 and at 8% about $1,468. Over 30 years the 8% loan costs roughly $142,000 MORE in interest than the 5% loan.

Why a 15 year term is the cheat code

Halving the term raises the monthly payment by less than double, because so much less interest builds up. The same $200,000 at 6.5% costs about $1,264 a month over 30 years but about $1,742 over 15 years - and saves well over $130,000 in interest.

Run your own numbers before a lender does

Change one thing at a time - price, rate, term - in a loan calculator and watch the total cost, not just the monthly payment. Lenders sell the monthly number. Smart buyers compare the total.