How much does a $150,000 mortgage cost?

Taking out a mortgage is a big decision and a major financial responsibility — the median sale price in April 2024 topped $433,000, the U.S. Census Bureau reported. Even a $150,000 mortgage comes with its share of costs, including interest, property taxes, and homeowners insurance.

These fees can add to your monthly payment and increase how much you owe over the life of your loan. The longer your repayment term and the higher your interest rate, the higher the overall cost.

If you’re thinking about getting a $150,000 mortgage, here’s how much it could cost you and how to get the best rates possible.

How much will a $150,000 mortgage cost you per month?

When you take out a $150,000 mortgage, you’ll need to make monthly payments for the life of the loan — typically 15 to 30 years. These payments will include the principal balance and annual percentage rate (APR), which is the interest rate plus any lender fees. Payments may also include escrow items such as homeowners insurance and property taxes.

Here’s a closer look at what your typical monthly payment might look like on a $150,000 mortgage with different rates and loan terms:

These calculations don’t include property taxes, private mortgage insurance (PMI), homeowners insurance, or homeowners association (HOA) fees. These can vary depending on where you live and what type of insurance is required for your property. They may also change over time, meaning your monthly payment could also fluctuate.

When you apply for a mortgage, your lender must give you a loan estimate. This will include the loan terms, estimated total monthly payment amount, and any escrow fees. Review this carefully to ensure you can comfortably afford the loan.

What factors influence your $150,000 mortgage payment?

Several factors can affect your monthly mortgage payment:

• Principal: This is the money you borrow to purchase the property. A $150,000 mortgage will have a $150,000 principal balance. The higher the principal, the higher your monthly payment.
• Interest: This is the cost of borrowing money from a lender. The higher your interest rate, the more you’ll pay each month and over the total loan term. Mortgages come with either a fixed or adjustable rate. Fixed-rate mortgages stay the same for the life of the loan, while adjustable-rate loans fluctuate with the market.
• Lender fees: These are additional fees related to underwriting your loan that are a part of your APR. 
• Escrow: If your lender is paying for property taxes, homeowners insurance, and mortgage insurance on your behalf, a portion of these costs will be added to your monthly payment. The money will generally be put into escrow until it’s time to pay those bills.
• Repayment term: You’ll make lower monthly payments with a longer loan term than you would for a shorter-term loan because you’re repaying the debt over more time. The trade-off is that you’ll pay more in interest over the life of the loan. Shorter-term loans have a higher monthly payment, but they also usually have lower interest rates. For a conventional loan, common repayment terms are 15, 20, or 30 years. 
• Down payment: The more money you put down at closing, the less you’ll need to borrow from a lender. This means smaller monthly payments and, in some cases, a lower mortgage interest rate. If you’re getting a conventional mortgage, putting at least 20% of the home value down will help you avoid PMI.

Amortization schedule on a $150,000 mortgage

How much you end up paying each month depends largely on the interest rate and loan term. Before you fill out a mortgage application, it’s a good idea to check its amortization schedule. This will show you how much your monthly payments will be, as well as the total cost of your mortgage over time.

Here’s what a mortgage amortization schedule looks like for a 30-year, $150,000 mortgage with a 6% interest rate:

This is what the amortization schedule looks like on a 15-year, $150,000 mortgage with a 6% fixed interest rate:

How to calculate your $150,000 mortgage payment

To calculate your monthly mortgage payment, you’re going to need to know the following:

• Total loan amount (this is the home purchase price minus the down payment)
• Loan repayment term
• Interest rate

You’ll also need to know your yearly property taxes, homeowners insurance, PMI, and HOA fees. For these, you can take the full annual cost of each and divide it by 12 to get your approximate monthly costs.

You can use an online mortgage calculator to get a better idea of how much your mortgage will cost each month. Using a calculator can also help you determine how affordable your home will be.

Can you afford a $150,000 mortgage?

Your monthly income, debts, and savings goals should all factor into whether you can afford a $150,000 mortgage. Before you complete a mortgage application or take out a loan, consider the following:

• Your debt-to-income ratio (DTI): This is the percentage of your gross monthly income that goes toward your debts. You can estimate your DTI by dividing your total monthly debt payments by your pre-tax income. For example, if your gross monthly income is $4,000 and your debt payments equal $1,500, then your DTI is 38%. Lenders may set their own requirements depending on your credit score, but the maximum DTI for conventional mortgages that conform to Fannie Mae standards is 45%.
• New loan payment: Ask yourself whether you can comfortably make the monthly payments on your mortgage. Be sure to account for all existing financial obligations.
• Upfront costs: Consider your mortgage’s total upfront costs — like closing fees and the down payment. These can add several thousand dollars to your initial payment. You should plan on spending 2% to 5% of your home’s cost on closing fees, according to Fannie Mae. On a $150,000 home, this would be about $3,000 to $7,500. 
• Other financial goals: Determine whether taking out a mortgage will align with your short- and long-term financial goals. For example, if you want to put more funds toward savings, investments, or travel, make sure you can still reach those goals with the additional mortgage payment factored in. 

Tips for securing the best mortgage rates for a $150,000 loan

Your mortgage rate is a key factor in your home’s overall affordability. Here are some ways to secure a competitive rate:

• Improve your credit score: Your credit score plays a major role in determining the interest rate on your mortgage. You’ll generally get a better rate if you have a higher credit score. If your credit score needs work, improve it by making on-time payments, paying down debts, and disputing errors on your credit reports. You might also be able to qualify for a mortgage with bad credit.
• Save for a larger down payment: Take some time to save up the funds for a larger down payment — ideally, 20% or more. This can eliminate the need for PMI, which can increase your monthly payment amount. It can also get you a better rate if you have more equity in the home.
• Use discount points: If your lender allows it, you can buy discount points to lower your interest rate. You’ll pay more upfront, but you’ll spend less in overall interest charges over time.
• Lower your DTI: Lenders want to be sure you can afford to take on a mortgage, so try to lower your DTI before applying. Pay down your existing debt and look for ways to increase your income.
• Get pre-approved: Mortgage pre-approval gives you an idea of what you can afford. It also outlines your potential interest rate and terms. You’ll need to provide the lender with financial documents — such as bank statements, W-2s, or pay stubs — and the lender will generally pull your credit report. 
• Compare lenders and negotiate: The first mortgage lender you find might not offer the best rates. Shop around and request quotes from several lenders before choosing one. If you get a better rate from one lender but prefer another, you might be able to negotiate a better rate with your preferred lender.
• Consider different loan types: Interest rates can vary based on the type of home loan, so shop around. Loans backed by a government agency — such as FHA, VA, and USDA loans — often come with lower interest rates than conventional loans, but they may have special fees or requirements.
• Choose a different loan term: If you can afford the higher monthly payment, a 15- or 20-year term could mean a lower interest rate than a 30-year loan.
• Refinance your mortgage: If you already have a $150,000 mortgage, refinancing it could get you a better mortgage interest rate, different loan term, or smaller monthly payments. You’ll need good credit to qualify for the best rates. Learn more about how refinancing works.

$150,000 mortgage FAQ

What is the monthly payment on a $150,000 mortgage?

Your monthly mortgage payment includes your principal and interest, plus homeowners insurance, property taxes, and HOA fees, if applicable. Say you take out a $150,000 mortgage with a 30-year term and a 6% fixed interest rate. Excluding escrow, your monthly payment would be $899.33. Your payments on a 15-year term would be $1,265.79. 

How much income do I need for a $150,000 mortgage?

Lenders will review your income when determining whether you qualify for a loan. A good rule of thumb is to go with a mortgage that’s no more than three times your annual income. So, for a $150,000 mortgage, you’d need to earn at least $50,000 a year. 

You can also consider your monthly income. If you earn $50,000 a year, that would be about $4,167 a month before taxes. If your lender requires a DTI below 36%, then that means your monthly debts should total no more than $1,500 a month for you to qualify. Other factors, like your debt load, down payment amount, and credit score all play a key role, too.

How much is a down payment on a $150,000 house?

A 20% down payment on a $150,000 house is $30,000. Some lenders will allow you to put down as little as 3% for a conventional loan, which would be $4,500 in this case. Your lender might require PMI if the down payment is less than 20%, but you can usually request to cancel PMI after you have sufficient equity in the home.

How much is a 30-year mortgage payment on a $150,000 loan?

This depends on the interest rate. A 6% interest rate would have a monthly payment of $899.33, excluding property taxes and insurance. Your monthly payment on a loan with a 7% interest rate, meanwhile, would be $997.95.