Monthly payment on a $250,000 loan
Principal & interest only (add property tax, insurance and any HOA/PMI for the full payment). At 6.5% a 30-year $250,000 mortgage costs $1,580/month; a 15-year loan costs $2,178/month but saves $176,863 in interest.
| Rate | 30-year | 15-year | Total interest (30y) | Total interest (15y) |
|---|---|---|---|---|
| 5.00% | $1,342 | $1,977 | $233,139 | $105,857 |
| 5.50% | $1,419 | $2,043 | $261,010 | $117,688 |
| 6.00% | $1,499 | $2,110 | $289,595 | $129,736 |
| 6.25% | $1,539 | $2,144 | $304,145 | $135,840 |
| 6.50% | $1,580 | $2,178 | $318,861 | $141,998 |
| 6.75% | $1,621 | $2,212 | $333,738 | $148,209 |
| 7.00% | $1,663 | $2,247 | $348,772 | $154,473 |
| 7.25% | $1,705 | $2,282 | $363,959 | $160,788 |
| 7.50% | $1,748 | $2,318 | $379,293 | $167,156 |
| 8.00% | $1,834 | $2,389 | $410,388 | $180,043 |
First 5 years at 6.5% (30-year)
| Year | Principal paid | Interest paid | Balance |
|---|---|---|---|
| 1 | $2,794 | $16,168 | $247,206 |
| 2 | $2,981 | $15,981 | $244,224 |
| 3 | $3,181 | $15,781 | $241,043 |
| 4 | $3,394 | $15,568 | $237,649 |
| 5 | $3,621 | $15,341 | $234,027 |
Income needed
Using the common 28% front-end guideline and assuming roughly $312/month for tax and insurance, a homeowner would need a gross income of about $81,114/year at 6.5%.
As a rental
A $250,000 loan is 75% of a $333,333 purchase. To pass the 1% rule that property would need about $3,333/month in rent; for a DSCR of 1.25 on P&I plus ~$312 tax and insurance, rent of about $2,366/month. Test it in the rental cash flow calculator or the mortgage calculator with your own rate.