Monthly payment on a $700,000 loan
Principal & interest only (add property tax, insurance and any HOA/PMI for the full payment). At 6.5% a 30-year $700,000 mortgage costs $4,424/month; a 15-year loan costs $6,098/month but saves $495,216 in interest.
| Rate | 30-year | 15-year | Total interest (30y) | Total interest (15y) |
|---|---|---|---|---|
| 5.00% | $3,758 | $5,536 | $652,790 | $296,400 |
| 5.50% | $3,975 | $5,720 | $730,828 | $329,525 |
| 6.00% | $4,197 | $5,907 | $810,867 | $363,260 |
| 6.25% | $4,310 | $6,002 | $851,607 | $380,353 |
| 6.50% | $4,424 | $6,098 | $892,811 | $397,595 |
| 6.75% | $4,540 | $6,194 | $934,467 | $414,986 |
| 7.00% | $4,657 | $6,292 | $976,562 | $432,524 |
| 7.25% | $4,775 | $6,390 | $1,019,084 | $450,207 |
| 7.50% | $4,895 | $6,489 | $1,062,021 | $468,036 |
| 8.00% | $5,136 | $6,690 | $1,149,087 | $504,122 |
First 5 years at 6.5% (30-year)
| Year | Principal paid | Interest paid | Balance |
|---|---|---|---|
| 1 | $7,824 | $45,270 | $692,176 |
| 2 | $8,348 | $44,746 | $683,828 |
| 3 | $8,907 | $44,187 | $674,921 |
| 4 | $9,504 | $43,590 | $665,417 |
| 5 | $10,140 | $42,954 | $655,277 |
Income needed
Using the common 28% front-end guideline and assuming roughly $875/month for tax and insurance, a homeowner would need a gross income of about $227,120/year at 6.5%.
As a rental
A $700,000 loan is 75% of a $933,333 purchase. To pass the 1% rule that property would need about $9,333/month in rent; for a DSCR of 1.25 on P&I plus ~$875 tax and insurance, rent of about $6,624/month. Test it in the rental cash flow calculator or the mortgage calculator with your own rate.