Monthly payment on a $200,000 loan
Principal & interest only (add property tax, insurance and any HOA/PMI for the full payment). At 6.5% a 30-year $200,000 mortgage costs $1,264/month; a 15-year loan costs $1,742/month but saves $141,490 in interest.
| Rate | 30-year | 15-year | Total interest (30y) | Total interest (15y) |
|---|---|---|---|---|
| 5.00% | $1,074 | $1,582 | $186,512 | $84,686 |
| 5.50% | $1,136 | $1,634 | $208,808 | $94,150 |
| 6.00% | $1,199 | $1,688 | $231,676 | $103,788 |
| 6.25% | $1,231 | $1,715 | $243,316 | $108,672 |
| 6.50% | $1,264 | $1,742 | $255,089 | $113,599 |
| 6.75% | $1,297 | $1,770 | $266,991 | $118,567 |
| 7.00% | $1,331 | $1,798 | $279,018 | $123,578 |
| 7.25% | $1,364 | $1,826 | $291,167 | $128,631 |
| 7.50% | $1,398 | $1,854 | $303,434 | $133,724 |
| 8.00% | $1,468 | $1,911 | $328,310 | $144,035 |
First 5 years at 6.5% (30-year)
| Year | Principal paid | Interest paid | Balance |
|---|---|---|---|
| 1 | $2,235 | $12,934 | $197,765 |
| 2 | $2,385 | $12,784 | $195,379 |
| 3 | $2,545 | $12,625 | $192,834 |
| 4 | $2,715 | $12,454 | $190,119 |
| 5 | $2,897 | $12,272 | $187,222 |
Income needed
Using the common 28% front-end guideline and assuming roughly $250/month for tax and insurance, a homeowner would need a gross income of about $64,892/year at 6.5%.
As a rental
A $200,000 loan is 75% of a $266,667 purchase. To pass the 1% rule that property would need about $2,667/month in rent; for a DSCR of 1.25 on P&I plus ~$250 tax and insurance, rent of about $1,893/month. Test it in the rental cash flow calculator or the mortgage calculator with your own rate.