How much will a $450,000 mortgage cost you?

Home prices have been on the rise, with the median price climbing above $439,000 — a 5% increase over the same time last year, according to Redfin. If you’re considering a $450,000 home loan, it’s important to understand what your monthly mortgage payments will look like. Various factors influence your mortgage costs, including interest rates, loan terms, and your credit score. Find out how much a $450,000 mortgage costs, and how to qualify for one.

How much will a $450,000 mortgage cost you per month?

Your monthly mortgage payment can vary depending on a variety of factors, including your interest rate and loan terms. A lower interest rate will result in a lower mortgage payment, and you’ll pay less over the life of the loan.

Common repayment terms are 15 or 30 years. If you take out a 15-year mortgage, your monthly payment will be higher, but you’ll pay less in interest over the life of the loan. The following table looks at how much you can expect to pay each month for principal and interest with different interest rates and loan terms: 

What factors influence your $450,000 mortgage payment? 

Your monthly mortgage payment largely consists of principal and interest. A portion of your homeowners insurance and property taxes will be added to the payment unless you’ve arranged to pay those bills yourself. The following factors may also influence your mortgage payments:

• Credit score: Lenders use your credit score to evaluate how likely you are to repay your mortgage. The minimum credit score for conventional loans that conform to Fannie Mae standards is 620, but you could get better interest rates if your score is higher. If you have bad credit, you may want to spend time improving it before applying for a mortgage. 
• Loan amount: A higher loan amount will result in higher monthly payments and closing costs. It’s important to consider whether you can afford a $450,000 mortgage or if you should opt for something smaller like a $250,000 loan.
• Down payment: Making a 20% down payment lowers the risk for your lender, so you’ll likely qualify for a lower interest rate. If your down payment is less than 20%, you may have higher interest rates. You’ll also have to pay for private mortgage insurance (PMI), which will add to your monthly costs.
• Type of interest rate: There are two types of interest rates — fixed-rate and adjustable. Fixed-rate loans have an interest rate that doesn’t change over the life of the loan, so you’ll have predictable loan payments. An adjustable-rate loan changes with the market, so your mortgage payment will fluctuate. 
• Loan type: Your interest rate will depend on the type of home loan you apply for. Conventional, VA, FHA, and USDA loans have different requirements and interest rates. 

Amortization table on a $450,000 mortgage

Before applying for mortgage pre-approval, you’ll have to decide whether you want a 15- or 30-year loan. Short loan terms will help you pay less interest over the life of the loan, but your monthly payments will be higher. In comparison, 30-year terms will have smaller monthly payments but will cost thousands more in interest. 

Here’s an amortization schedule for a 30-year, $450,000 mortgage with a 6% fixed rate:

Here’s an amortization schedule on a 15-year, $450,000 mortgage with a 6% fixed rate:

How to calculate your $450,000 mortgage payment 

Before buying a home, it’s a good idea to estimate your mortgage payments to ensure you can afford it. You can do this by entering the following information into an online mortgage calculator:

• Loan amount
• Down payment
• Interest rate
• Loan terms
• Property taxes
• Homeowners insurance
• Loan type

Providing as much information as possible will make this estimate more accurate. Don’t forget to consider the closing costs — Freddie Mac advises buyers to be prepared to pay 2% to 5% of the home’s sale price at closing.

Can you afford a $450,000 mortgage? 

A $450,000 mortgage is a big investment, so you want to make sure you can afford it. Here are some steps you can take to determine whether it’s in the budget:

• Gross monthly income: Start by calculating your gross monthly income, which is the amount you earn before taxes have been taken out. You can use the 28/36 rule to get an idea of what you can afford based on your income. The 28/36 rule is a guideline that suggests you should spend no more than 28% of your pre-tax income on housing and no more than 36% on all of your debt combined. 
• Determine your debt-to-income ratio (DTI): You can calculate your DTI to see how much of your gross income goes toward your monthly debt payments. Add your total debt payments — such as credit cards, car payments, and student loans — and divide that amount by your gross monthly income to find your DTI. Lenders use your DTI to determine whether you can afford the monthly mortgage payments. Different lenders may have different requirements, but you should aim to have a DTI below 45%, including your potential mortgage payment.
• Estimate your monthly payments: You can use a mortgage calculator to estimate your principal and interest payments. See what your payment would be with different terms, loan amounts, and interest rates, and see how the prospective monthly payment would fit into your current DTI.
• Come up with a budget: Create a budget with your regular monthly expenses, like groceries, utilities, and loan payments. This will help you see whether you can afford your estimated monthly mortgage payment. 

Tips for securing the best mortgage rates for a $450,000 loan 

Securing the lowest possible rates on your mortgage can save you thousands of dollars over the life of the loan. Here are four tips for securing good mortgage rates:

• Improve your credit score: Start by requesting a free credit score from AnnualCreditReport.com to check for and dispute any errors. You can improve your score by making timely payments and paying down debts.
• Make a 20% down payment: Making a 20% down payment will help you secure better rates and avoid paying for PMI. 
• Choose shorter loan terms: If you can afford the higher monthly payment, opt for a 15-year mortgage. This will help you qualify for better rates and save on interest payments.
• Shop around: The best way to find low rates on your mortgage is by shopping around. Request quotes from at least three different lenders, and compare the rates, terms, and fees they offer you. 

$450,000 mortgage FAQ 

What is the monthly payment on a $450,000 loan?

The monthly mortgage payment on a $450,000 loan depends on your interest rate and repayment terms. For example, you can expect to pay $3,797.36 per month on a 15-year mortgage with a 6% interest rate. 

How much is a down payment on a $450,000 house?

If your loan amount is $450,000, a 20% down payment is $90,000. Your lender might let you put less down, though PMI might be required if you do. A 5% down payment would be $22,500, and a 10% down payment would be $45,000. 

Can I afford a $450,000 mortgage on a $100,000 salary?

Maybe — it depends on your interest rate, repayment terms, down payment, and DTI. To figure out how your income stacks up, start by calculating your pre-tax income. With a $100,000 salary, your gross monthly income would be around $8,333. If your goal is to spend 28% on housing, you’d be shopping for a monthly payment of around $2,333.24.