Since 2020, median home prices have increased 28%. A $300,000 home, once near the median, it's now lower than average. As of the first quarter of 2024, the average and median home prices in the United States are both $420,800
If you're considering a $300,000 home, the good news is that you can still find good value in many years. However, in some places, you might be priced out. Read on to understand how much is a 300k mortgage per month to start planning your monthly budget.
Key Points
- A $300,000 mortgage is less than the average mortgage in 2024.
- The monthly cost of a $300,000 mortgage depends on the interest rate (APR), term, taxes, PMI, and property insurance.
- Understanding the cost of a $300,000 mortgage can help you prepare financially for a home purchase.
How Much Does a $300,000 House Cost Now?
A $300,000 home doesn't just cost the agreed-upon price. You'll also need to consider closing costs, mortgage fees, private mortgage insurance, and interest rates expressed as annual percentage rates (APR). The greatest determinant of your monthly mortgage payment is the interest rate. Even a 1% increase in interest rate can result in significantly higher monthly payments.
If you choose an adjustable-rate mortgage, you could benefit from lower interest rates at certain times, but your total monthly payment will change periodically. That means, of course, that sometimes you could be forced to pay higher interest rates.
Additionally, whether you choose a 30-year or a 15-year mortgage will affect how much you pay each month. With a 15-year mortgage, you'll pay less in total interest and own the home outright sooner, but you'll also have significantly higher monthly payments. On the other hand, a 30-year mortgage offers lower monthly payments but you'll pay more in interest over the lifetime of the loan. Here's an in-depth look at each factor and how they affect your monthly mortgage payment.
30-Year Fixed Mortgage Rate
How much a $300k house costs for a 30-year fixed mortgage depends on your interest rate. At an interest rate of 7% — and assuming you make no down payment so the full loan amount is $300,000 — your monthly payment would be $1,996. That's without private mortgage insurance, property tax, or home insurance.
If you made no down payment, you'd have to pay private mortgage insurance (PMI). Assuming a PMI of 1%, plus $200 per month each for property tax and home insurance, your total monthly payment would come to $2,645.91 with PMI and $2,395.91 after 152 months when you're no longer required to have PMI.
Below is a table showing estimated monthly payments based on different interest rates. Note that this table doesn't include PMI, property taxes, or insurance.
| Interest Rates | Monthly Payments |
| 5.50% | $1,703.37 |
| 5.75% | $1,750.72 |
| 6.00% | $1,798.65 |
| 6.25% | $1,847.15 |
| 6.50% | $1,896.20 |
| 6.75% | $1,945.79 |
| 7.00% | $1,995.91 |
| 7.25% | $2,046.53 |
| 7.50% | $2,097.64 |
| 7.75% | $2,149.24 |
| 8.00% | $2,201.29 |
| 8.25% | $2,253.80 |
| 8.50% | $2,306.74 |
15-Year Fixed Mortgage Rate
A $300k house costs less in interest payments with a 15-year fixed-rate mortgage, but you'll need to spend more on monthly payments. On a $300,000 loan with a 15-year fixed interest rate of 7%, you'll need to pay $2,696.48 per month, without accounting for PMI, property taxes, or insurance. That's about $700 a month more than a 30-year fixed-rate mortgage with the same interest rate. However, throughout the mortgage, you'll pay $185,367 in interest vs. $418,527 on a 30-year mortgage. And you'll own the home outright much sooner.
Below is a table for other computations based on interest rates, without accounting for PMI, property tax, or insurance which can vary by lender and property location.
| Interest Rates | Monthly Payments |
| 5.50% | $2,451.25 |
| 5.75% | $2,491.23 |
| 6.00% | $2,531.57 |
| 6.25% | $2,572.27 |
| 6.50% | $2,613.32 |
| 6.75% | $2,654.73 |
| 7.00% | $2,696.48 |
| 7.25% | $2,738.59 |
| 7.50% | $2,781.04 |
| 7.75% | $2,823.83 |
| 8.00% | $2,866.96 |
| 8.25% | $2,910.42 |
| 8.50% | $2,954.22 |
Adjustable-Rate Mortgage
An adjustable-rate mortgage or ARM has as an interest rate that adjusts based on a benchmark index. For example, you might have an interest rate tied to the Secured Overnight Financing Rate (SOFR). Your interest rate could be expressed as SOFR + 3%. As of May 2024, the Secured Overnight Financing Rate is at 5.31%. If your adjustable-rate mortgage is SOFR+3%, your interest rate would be 8.31%. Adjustable-rate mortgages usually have a period of one to five years with a fixed interest rate before readjusting at periods of one year or every six months.
For example, with an 8.31% interest rate on a 30-year, $300,000 mortgage, your monthly payment would be $2,266.47. With each adjustment period, the payment is calculated based on the principal on the loan and the new interest rate. If in the next adjustment, your interest rate drops to 7.31%, your new monthly payment would be around $2,058.75.
You can check with your lender and compare interest rates before deciding if the risk of a higher interest rate makes a variable-rate mortgage a good option for you and compare variable vs. fixed rate mortgages.
30-Year Fixed-Rate Mortgage Amortization Breakdown
Even though you'll pay the same amount each month for a fixed-rate mortgage, how much of that payment goes to your mortgage principal and how much goes to interest varies over time. Your amortization schedule shows how much of each payment goes toward interest and principal.
Here is a sample mortgage amortization schedule on a 30-year, fixed-rate mortgage for $300,000 with a 6.5% interest rate.
| Year | Beginning balance | Interest paid | Principal paid | Ending balance |
| 1 | $300,000 | $19,401.27 | $3,353.18 | $296,646.82 |
| 2 | $296,646.82 | $19,176.70 | $3,577.74 | $293,069.08 |
| 3 | $293,069.08 | $18,937.10 | $3,817.35 | $289,251.73 |
| 4 | $289,251.73 | $18,681.44 | $4,073.01 | $285,178.72 |
| 5 | $285,178.72 | $18,408.66 | $4,345.79 | $280,832.93 |
| 6 | $280,832.93 | $18,117.62 | $4,636.83 | $276,196.10 |
| 7 | $276,196.10 | $17,807.08 | $4,947.37 | $271,248.73 |
| 8 | $271,248.73 | $17,475.75 | $5,278.70 | $265,970.03 |
| 9 | $265,970.03 | $17,122.22 | $5,632.23 | $260,337.81 |
| 10 | $260,337.81 | $16,745.02 | $6,009.43 | $254,328.38 |
| 11 | $254,328.38 | $16,342.56 | $6,411.89 | $247,916.49 |
| 12 | $247,916.49 | $15,913.14 | $6,841.31 | $241,075.18 |
| 13 | $247,916.49 | $15,454.97 | $7,299.48 | $233,775.70 |
| 14 | $233,775.70 | $14,966.11 | $7,788.34 | $225,987.36 |
| 15 | $225,987.36 | $14,444.51 | $8,309.94 | $217,677.42 |
| 16 | $217,677.42 | $13,887.98 | $8,866.47 | $208,810.95 |
| 17 | $208,810.95 | $13,294.17 | $9,460.28 | $199,350.68 |
| 18 | $199,350.68 | $12,660.60 | $10,093.85 | $189,256.83 |
| 19 | $189,256.83 | $11,984.60 | $10,769.85 | $178,486.98 |
| 20 | $178,486.98 | $11,263.32 | $11,491.13 | $166,995.85 |
| 21 | $166,995.85 | $10,493.74 | $12,260.71 | $154,735.14 |
| 22 | $154,735.14 | $9,672.62 | $13,081.83 | $141,653.30 |
| 23 | $141,653.30 | $8,796.50 | $13,957.95 | $127,695.36 |
| 24 | $127,695.36 | $7,861.71 | $14,892.74 | $112,802.62 |
| 25 | $112,802.62 | $6,864.32 | $15,890.13 | $96,912.49 |
| 26 | $96,912.49 | $5,800.13 | $16,954.32 | $79,958.16 |
| 27 | $79,958.16 | $4,664.66 | $18,089.79 | $61,868.38 |
| 28 | $61,868.38 | $3,453.16 | $19,301.29 | $42,567.08 |
| 29 | $42,567.08 | $2,160.51 | $20,593.94 | $21,973.15 |
| 30 | $21,973.15 | $781.30 | $21,973.15 | $0.00 |
What Affects Your Monthly Mortgage Payments?
Your monthly mortgage payments are a combination of principal, interest, taxes, and insurance, often abbreviated as PITI. While interest rates have a significant impact on your total monthly payment, insurance, and taxes can also add significantly to the total. However, unlike interest rates, you will usually have to pay local insurance rates and taxes.
Here's an example: You plan to borrow $300,000 and secure a 6.5% interest rate. That means your monthly payment should be $1,896.20. But after taking into account PITI, the total payment could be:
- Principal+interest: $1,896.20
- PMI (0.5%): $125
- Taxes: $225
- Insurance: $200
- Total: $2,446.20
After 145 months when you have at least 20% equity in the home and can drop the PMI, your monthly payments will drop to $2,321.20.
How Much Do You Need to Make to Afford a $300,000 Mortgage?
In general, lenders look for a debt-to-income (DTI) ratio of 43% or less — but that includes total debt from auto loans, student loans, credit card debt, and any other outstanding debt. Ideally, aim to spend no more than ⅓ or 33% of your income on your mortgage payments. That would mean that if you want to buy a $300,000 home with a 7% interest rate and total monthly payments of $2,645.91 with PMI, taxes, and insurance.
To calculate how much you need to make to afford $2,646 per month, simply multiply by three. To comfortably afford a $300,000 home with a 7% interest rate, you'll need to make at least $7,938 a month in take-home pay or about $95,000 annually.
Of course, you could increase your DTI and potentially still be approved for a mortgage with a slightly lower salary. And if you and your partner are applying together, the lender could look at your combined salaries and combined debt.
Can You Afford a $300,000 Mortgage?
Whether you can afford a $300,000 mortgage depends not only on your income but also on current interest rates and whether you opt for a 15-year or 30-year mortgage and choose fixed or variable interest rates. In general, you'll pay off the mortgage faster and pay less in interest with a shorter mortgage term. A longer mortgage term results in lower monthly payments, making a $300,000 mortgage affordable for more families.
When deciding whether you can afford a mortgage, speak with mortgage lenders, a financial advisor, or even a CPA to understand your bigger financial picture and how homeownership will affect your financial goals.
Frequently Asked Questions
Can I afford a $300,000 house on a $70,000 salary?
You can afford a $300,000 house on a $70,000 salary if you keep other expenses low or at times when interest rates are low. A $70,000 salary comes out to $5,833 per month. To afford the $2,646 monthly mortgage payments (with 7% interest) for a $300,000 home, it would take 45.36% of your salary, assuming the $70,000 salary is after-tax. Speak to your mortgage lender to see if you meet other qualification requirements.
What is the 20% down payment on a $300,000 house?
A 20% down payment on a $300,000 house comes out to $60,000.
What credit score is needed to buy a $300,000 house?
What credit score you need to buy a $300,000 house depends on the type of loan and individual lender criteria. You could buy a $300,000 house with a credit score as low as 500, although a higher credit score can help you secure better interest rates and terms.
About Alison Plaut
Alison Kimberly is a freelance content writer with a Sustainable MBA, uniquely qualified to help individuals and businesses achieve the triple bottom line of environmental, social, and financial profitability. She has been writing for various non-profit organizations for 15+ years. When not writing, you will find her promoting education and meditation in the developing world, or hiking and enjoying nature.