Monthly payment on a $400,000 loan
Principal & interest only (add property tax, insurance and any HOA/PMI for the full payment). At 6.5% a 30-year $400,000 mortgage costs $2,528/month; a 15-year loan costs $3,484/month but saves $282,981 in interest.
| Rate | 30-year | 15-year | Total interest (30y) | Total interest (15y) |
|---|---|---|---|---|
| 5.00% | $2,147 | $3,163 | $373,023 | $169,371 |
| 5.50% | $2,271 | $3,268 | $417,616 | $188,300 |
| 6.00% | $2,398 | $3,375 | $463,353 | $207,577 |
| 6.25% | $2,463 | $3,430 | $486,633 | $217,344 |
| 6.50% | $2,528 | $3,484 | $510,178 | $227,197 |
| 6.75% | $2,594 | $3,540 | $533,981 | $237,135 |
| 7.00% | $2,661 | $3,595 | $558,036 | $247,156 |
| 7.25% | $2,729 | $3,651 | $582,334 | $257,261 |
| 7.50% | $2,797 | $3,708 | $606,869 | $267,449 |
| 8.00% | $2,935 | $3,823 | $656,621 | $288,070 |
First 5 years at 6.5% (30-year)
| Year | Principal paid | Interest paid | Balance |
|---|---|---|---|
| 1 | $4,471 | $25,868 | $395,529 |
| 2 | $4,770 | $25,569 | $390,759 |
| 3 | $5,090 | $25,249 | $385,669 |
| 4 | $5,431 | $24,909 | $380,238 |
| 5 | $5,794 | $24,545 | $374,444 |
Income needed
Using the common 28% front-end guideline and assuming roughly $500/month for tax and insurance, a homeowner would need a gross income of about $129,783/year at 6.5%.
As a rental
A $400,000 loan is 75% of a $533,333 purchase. To pass the 1% rule that property would need about $5,333/month in rent; for a DSCR of 1.25 on P&I plus ~$500 tax and insurance, rent of about $3,785/month. Test it in the rental cash flow calculator or the mortgage calculator with your own rate.