How much does a $350,000 mortgage cost?

With the median U.S. home costing around $400,000, according to data reported by REALTOR.com, most people will need a mortgage loan to become homeowners. A mortgage allows you to pay for your home over a long span of time — commonly 15 or 30 years — with interest, to compensate your lender for the money you borrowed.

Find out what factors impact the monthly payments for a $350,000 mortgage so you can make yours as affordable as possible.

Monthly payments for a $350,000 mortgage

Your monthly mortgage payment will include principal and interest. In addition, there are other regular costs that might be included in your monthly payment. Here’s a quick overview of each expense:

• Principal: The money you’ve borrowed.
• Interest: The cost to borrow the principal. With a fixed-rate mortgage, every monthly payment will be the same and will consist of interest and principal.

• Escrow: If your lender requires it, you will pay one-twelfth of your annual property tax bill and one-twelfth of your annual homeowners insurance premium with your monthly mortgage payment. These funds will be placed in an escrow account to cover those bills. If your lender doesn’t require an escrow, you’ll have to set aside this money yourself and pay the bills in full when they’re due.
• Mortgage insurance: If you take out an FHA loan or put down less than 20% on a conventional loan, mortgage insurance will be included in your monthly payment.
• Association dues: If you buy a home in a homeowners association, you’ll pay monthly, quarterly, or annual HOA dues. They usually won’t be included in your mortgage payment, but it’s still helpful to factor them into your monthly homeownership costs.

The following table illustrates how your mortgage rate and loan term affect your monthly principal and interest payments. The lowest interest rate and longer loan term give you the lowest monthly payment. You’ll have a higher payment with a shorter loan term, but your mortgage will be paid off in half the time. 

Where to get a $350,000 mortgage

With the median U.S. home price hovering around $400,000, no lender will balk at an application for a $350,000 mortgage — as long as you have the income to support it. You’ll have hundreds of lenders to choose from, though getting pre-approved with three to five should be enough to help you get a competitive offer. 

Mortgage lenders fall into three broad categories:

• Retail lenders: You can get a mortgage from a retail lender that you apply with directly. This might be an online lender like NBKC Bank or Homefinity, or a lender with a branch office you can walk into, like Chase or your local credit union. Retail lenders offer conventional loans and may also offer FHA, VA, and jumbo loans.
• Mortgage brokers: You can also get a loan from a mortgage broker, who works with multiple lenders and will shop around to help you get the best deal, saving you time and money. 
• Correspondent lenders: Like a mortgage broker, this type of lender will shop around and help find you the best deals. However, instead of just acting as a go-between to connect you to a financial institution, correspondent lenders will finance the mortgage with their own funds. 

Anyone can work with a broker or correspondent lender, but they can be helpful for borrowers with complicated finances or those looking for a less common type of loan. For example, someone who is self-employed, a medical resident, new to the United States, or looking to finance an investment property might have an easier time finding a loan and getting qualified for a mortgage through a broker or correspondent.

What to consider before applying for a $350,000 mortgage

When you’re preparing to buy a home, it’s important to understand both the short-term and long-term costs. As a first-time homebuyer, you may not fully comprehend the financial commitment required of you. 

You should aim to have a mortgage that is no more than two to three times your annual income, according to a worksheet from the Federal Deposit Insurance Corporation (FDIC). The FDIC also says you can calculate how much house you can afford by looking at your gross monthly income compared to your monthly mortgage payment. Most lenders prefer your housing expenses to be less than 28% of your pre-tax monthly income, Time reported. 

In the short term: You’ll need to have enough to cover upfront costs, including:

• Down payment: You’ll typically need to put down a portion of your home’s sale price to get a mortgage. You may qualify for a conventional loan with as little as 3% down, though some lenders might require you to pay for mortgage insurance if you put down less than 20%. 
• Closing costs: These costs can be about 2% to 5% of your home’s value, though Assurance IQ reported the average dollar amount of closing costs paid in 2023 was about $4,243. Closing costs may include origination fees, title insurance and fees, homeowners insurance, and escrow account charges.
• Moving expenses: These can vary greatly if you’re moving across town or across the country. Consider whether you need to hire movers or rent a truck. Also make sure you factor in moving supplies, such as boxes, tape, and other packing supplies. 
• Repairs and renovations: Your new home might need some repairs and customizations. Try to set a budget for necessary repairs to deal with right away, such as fixing a roof or heating/air conditioning. 

In the long term: Plan for your ongoing expenses, too, including: 

• Monthly mortgage payment: If you have a fixed term, this will typically stay the same for the life of the loan. 
• Maintenance and upkeep: You’ll have expenses to maintain your home and yard (if you have one). These might include heating system tune-ups, mowing or snow removal, replacing appliances, and plumbing repairs. You can also consider any renovation projects you didn’t tackle when you moved in. 
• Homeowners insurance: If your lender required escrow to pay for homeowners insurance, the cost might be rolled into your monthly mortgage payment. Still, you might also have flood insurance and windstorm insurance if you live in certain areas, like much of the Gulf and Atlantic Coasts. 
• Property taxes: These are calculated based on your home’s value and your city or state’s tax rate. If you have an escrow account, you’ll likely pay for property taxes with your monthly payment. 
• Homeowners association dues: If you live in a condo or fancy neighborhood, you’ll have homeowners association dues and possibly special assessments. These costs all tend to get more expensive every year.

Amortization table on a $350,000 mortgage

This amortization schedule for a 30-year, $350,000 mortgage with a 6% fixed rate illustrates how much of the monthly payment goes toward interest and principal and how your principal balance goes down over time. 

The amount changes gradually each month, but to simplify the table, we’ve shown what your first monthly payment each year would look like. This amortization schedule also shows how your principal balance declines over time and your total interest paid rises over time.

The following amortization schedule shows how things change with a loan term of 15 years instead of 30. You’ll pay more principal and less interest each month. You’ll also pay less interest overall, but your monthly payment will be higher.

How to get a $350,000 mortgage

Applying for a mortgage can be simple when you know what to expect and are prepared with the information lenders will ask you for. Follow these steps to turn your homeowning dreams into reality:

1. Create a budget: Review your income and expenses to see what range of monthly payments you’d be comfortable with. Don’t forget to include retirement contributions, emergency savings, and home maintenance in your budget.

2. Check your credit: Use a free service such as AnnualCreditReport.com to get a copy of your credit report from each of the three major credit bureaus. Review each report to make sure you recognize each loan and credit card account listed. Use a separate free service to check your credit scores. (Check if any of your credit card issuers offer it.)

3. Get pre-approved: Submit mortgage pre-approval applications with several retail lenders, a correspondent lender, or a mortgage broker. In this step, you’ll learn how your own assumptions about your budget and credit compare to how lenders evaluate them. Mortgage rates change daily, so it’s best to submit all your pre-approval applications on the same day. This way, you can accurately compare each lender’s rate and fees. 

4. Compare offers: Once you have at least three pre-approvals — ideally, fully underwritten ones where the lender has closely examined your finances — you can see which one offers the best pricing. 

5. Choose your lender: The longer you plan to keep your loan, the more important it is to get a low interest rate. But if you expect to move within a few years, you’ll want to minimize your closing costs, which might entail a higher rate. Once you’ve decided which offer to go with, tell that lender you’d like to proceed and let the others know you won’t be moving forward. 

6. Prepare to close: Don’t do anything that might cause a lender to reevaluate your finances. The goal is to keep your loan approval intact and your closing date on schedule. Don’t open or close any accounts, move money around, or make large deposits or withdrawals. If you suddenly need to change jobs or make a large purchase, talk to your lender first. 

7. Sign your closing documents: Set aside a couple of hours to carefully review the pages and pages of paperwork you’ll have to sign. Regardless of what anyone has told you or what documents you’ve looked at before, these are the ones that count. Take your time and don’t be afraid to question things you don’t understand. You can always ask someone not involved in the transaction — like a lawyer, parent, or friend — for help.