Monthly payment on a $500,000 loan
Principal & interest only (add property tax, insurance and any HOA/PMI for the full payment). At 6.5% a 30-year $500,000 mortgage costs $3,160/month; a 15-year loan costs $4,356/month but saves $353,726 in interest.
| Rate | 30-year | 15-year | Total interest (30y) | Total interest (15y) |
|---|---|---|---|---|
| 5.00% | $2,684 | $3,954 | $466,279 | $211,714 |
| 5.50% | $2,839 | $4,085 | $522,020 | $235,375 |
| 6.00% | $2,998 | $4,219 | $579,191 | $259,471 |
| 6.25% | $3,079 | $4,287 | $608,291 | $271,681 |
| 6.50% | $3,160 | $4,356 | $637,722 | $283,997 |
| 6.75% | $3,243 | $4,425 | $667,477 | $296,419 |
| 7.00% | $3,327 | $4,494 | $697,544 | $308,945 |
| 7.25% | $3,411 | $4,564 | $727,917 | $321,577 |
| 7.50% | $3,496 | $4,635 | $758,586 | $334,311 |
| 8.00% | $3,669 | $4,778 | $820,776 | $360,087 |
First 5 years at 6.5% (30-year)
| Year | Principal paid | Interest paid | Balance |
|---|---|---|---|
| 1 | $5,589 | $32,335 | $494,411 |
| 2 | $5,963 | $31,961 | $488,448 |
| 3 | $6,362 | $31,562 | $482,086 |
| 4 | $6,788 | $31,136 | $475,298 |
| 5 | $7,243 | $30,681 | $468,055 |
Income needed
Using the common 28% front-end guideline and assuming roughly $625/month for tax and insurance, a homeowner would need a gross income of about $162,229/year at 6.5%.
As a rental
A $500,000 loan is 75% of a $666,667 purchase. To pass the 1% rule that property would need about $6,667/month in rent; for a DSCR of 1.25 on P&I plus ~$625 tax and insurance, rent of about $4,732/month. Test it in the rental cash flow calculator or the mortgage calculator with your own rate.