Monthly payment on a $550,000 loan
Principal & interest only (add property tax, insurance and any HOA/PMI for the full payment). At 6.5% a 30-year $550,000 mortgage costs $3,476/month; a 15-year loan costs $4,791/month but saves $389,098 in interest.
| Rate | 30-year | 15-year | Total interest (30y) | Total interest (15y) |
|---|---|---|---|---|
| 5.00% | $2,953 | $4,349 | $512,907 | $232,886 |
| 5.50% | $3,123 | $4,494 | $574,222 | $258,913 |
| 6.00% | $3,298 | $4,641 | $637,110 | $285,418 |
| 6.25% | $3,386 | $4,716 | $669,120 | $298,849 |
| 6.50% | $3,476 | $4,791 | $701,495 | $312,396 |
| 6.75% | $3,567 | $4,867 | $734,224 | $326,060 |
| 7.00% | $3,659 | $4,944 | $767,299 | $339,840 |
| 7.25% | $3,752 | $5,021 | $800,709 | $353,734 |
| 7.50% | $3,846 | $5,099 | $834,445 | $367,742 |
| 8.00% | $4,036 | $5,256 | $902,854 | $396,096 |
First 5 years at 6.5% (30-year)
| Year | Principal paid | Interest paid | Balance |
|---|---|---|---|
| 1 | $6,147 | $35,569 | $543,853 |
| 2 | $6,559 | $35,157 | $537,293 |
| 3 | $6,998 | $34,718 | $530,295 |
| 4 | $7,467 | $34,249 | $522,828 |
| 5 | $7,967 | $33,749 | $514,860 |
Income needed
Using the common 28% front-end guideline and assuming roughly $688/month for tax and insurance, a homeowner would need a gross income of about $178,452/year at 6.5%.
As a rental
A $550,000 loan is 75% of a $733,333 purchase. To pass the 1% rule that property would need about $7,333/month in rent; for a DSCR of 1.25 on P&I plus ~$688 tax and insurance, rent of about $5,205/month. Test it in the rental cash flow calculator or the mortgage calculator with your own rate.