By Kevin Brouillard ·February 26, 2024 · 7 minute read
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The total cost of a mortgage depends on the loan term and the interest rate. For a $250,000 mortgage with a 30-year term and 7% interest rate, borrowers can expect a monthly mortgage payment around $1,663 a month.
However, there are other mortgage costs to consider — both at closing and over the life of the loan. Here’s a look at the factors that affect how much your mortgage costs, as well as what you can expect to pay for a $250,000 mortgage.
Cost of a $250,000 Mortgage
The cost of a $250,000 mortgage is more than just the borrowed amount, known as the loan principal. While borrowers repay the principal, they are also required to pay interest, calculated as a percentage of the loan amount, to cover the cost of issuing the loan. A percentage point difference in interest rate could bump up a $250,000 mortgage payment by $100 or more a month, significantly increasing the total interest paid over the life of the loan.
Most mortgages require a down payment, with the exception of VA loans and USDA loans. The minimum down payment depends on the type of loan and a borrower’s financial situation. For example, the required down payment on a FHA loan is 3.5% for borrowers with credit scores of at least 580 versus 10% for borrowers with credit scores between 500-579.
The down payment amount also impacts the total cost of home mortgage loans. Homeowners will be on the hook for paying private mortgage insurance (PMI) with their monthly payments unless they put 20% or more down. PMI is usually 0.5% to 1.5% of the loan principal per year, spread across monthly mortgage payments.
Buying a house also involves closing costs, typically ranging from 3% to 6% of the loan principal. For a $250,000 mortgage, closing costs would likely be between $7,500 and $15,000. If saving up for both the down payment and closing proves to be a challenge, buyers may have the option to roll closing costs into a home loan to spread out the cost over time.
First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.
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Monthly Payments for a $250,000 Mortgage
Figuring out how much you can afford to spend on housing each month is an essential step to determining your homebuying budget. Monthly mortgage payments typically include four components: loan principal, interest, taxes, and insurance.
Assuming a 30-year fixed term and an interest rate of 7%, a $250,000 mortgage monthly payment would amount to $1,663 for the loan principal and interest. Choosing a 15-year loan term with a 7% interest rate would translate to a monthly mortgage payment of $2,247. Note that these figures do not include property taxes and insurance. Taxes vary according to your property’s assessed value, as well as by location — so the cost of living by state is another factor buyers must consider.
Initially, the majority of the monthly mortgage payment goes toward interest rather than paying off the loan principal. Over time, a greater share of the mortgage payment is applied to the principal balance, helping build equity in your home.
For a more detailed look at what a $250,000 mortgage payment amounts to, using a mortgage calculator or home affordability calculator lets you experiment with different down payments, interest rates, and loan terms.
💡 Quick Tip: If you refinance your mortgage and shorten your loan term, you could save a substantial amount in interest over the lifetime of the loan.
Where to Get a $250,000 Mortgage
The majority of U.S. homebuyers use a mortgage loan to finance their home purchase. Buyers can get a $250,000 mortgage from a variety of lenders, including banks, credit unions, mortgage brokers, and online lenders. Shopping around and looking at multiple lenders is recommended to help secure a lower interest rate and save thousands over the life of a mortgage. Besides the interest rate, examine the differences in fees, mortgage points, and expected closing costs when comparing lenders.
There are also different types of mortgage loans to consider. Your mortgage loan options depend in part on your location, Veteran status, down payment size, and whether you qualify as a first-time homebuyer. For comparison, here’s the mortgage amortization schedule on a 30-year mortgage vs a 15-year loan. In both cases we are assuming a $250,000 mortgage with a 7% fixed rate. Looking at a $250,000 mortgage payment 30 years’ out, borrowers would pay $194,284 more in interest payments than with a 15-year term.
| Beginning Balance | Monthly Payment | Total Interest Paid | Total Principal Paid | Remaining Balance |
|---|---|---|---|---|
| $250,000 | $1,663.26 | $17,420 | $2,540 | $247,460 |
| $247,460 | $1,663.26 | $17,236 | $2,723 | $244,737 |
| $244,737 | $1,663.26 | $17,038 | $2,920 | $241,817 |
| $241,817 | $1,663.26 | $16,828 | $3,131 | $238,686 |
| $238,686 | $1,663.26 | $16,602 | $3,357 | $235,329 |
| $235,329 | $1,663.26 | $16,359 | $3,600 | $231,729 |
| $231,729 | $1,663.26 | $16,099 | $3,860 | $227,869 |
| $227,869 | $1,663.26 | $15,820 | $4,139 | $223,729 |
| $223,729 | $1,663.26 | $15,520 | $4,439 | $219,290 |
| $219,290 | $1,663.26 | $15,200 | $4,760 | $214,531 |
| $214,531 | $1,663.26 | $14,855 | $5,104 | $209,427 |
| $209,427 | $1,663.26 | $14,487 | $5,473 | $203,955 |
| $203,955 | $1,663.26 | $14,091 | $5,868 | $198,087 |
| $198,087 | $1,663.26 | $13,667 | $6,292 | $191,794 |
| $191,794 | $1,663.26 | $13,212 | $6,747 | $185,047 |
| $185,047 | $1,663.26 | $12,724 | $7,235 | $177,812 |
| $177,812 | $1,663.26 | $12,201 | $7,758 | $170,054 |
| $170,054 | $1,663.26 | $11,640 | $8,319 | $161,735 |
| $161,735 | $1,663.26 | $11,039 | $8,920 | $152,815 |
| $152,815 | $1,663.26 | $10,394 | $9,565 | $143,250 |
| $143,250 | $1,663.26 | $9,703 | $10,256 | $132,994 |
| $132,994 | $1,663.26 | $8,961 | $10,998 | $121,996 |
| $121,996 | $1,663.26 | $8,166 | $11,793 | $110,203 |
| $110,203 | $1,663.26 | $7,314 | $12,645 | $97,557 |
| $97,557 | $1,663.26 | $6,399 | $13,560 | $83,998 |
| $83,998 | $1,663.26 | $5,419 | $14,540 | $69,458 |
| $69,458 | $1,663.26 | $4,368 | $15,591 | $53,867 |
| $53,867 | $1,663.26 | $3,241 | $16,748 | $37,149 |
| $37,149 | $1,663.26 | $2,033 | $17,927 | $19,222 |
| $19,222 | $1,663.26 | $737 | $19,222 | $0 |
| Beginning Balance | Monthly Payment | Total Interest Paid | Total Principal Paid | Remaining Balance |
|---|---|---|---|---|
| $250,000 | $2,247.07 | $17,190 | $9,774 | $240,226 |
| $240,226 | $2,247.07 | $16,484 | $10,481 | $229,744 |
| $229,744 | $2,247.07 | $15,726 | $11,239 | $218,506 |
| $218,506 | $2,247.07 | $14,914 | $12,051 | $206,454 |
| $206,454 | $2,247.07 | $14,042 | $12,922 | $193,532 |
| $193,532 | $2,247.07 | $13,108 | $13,857 | $179,675 |
| $179,675 | $2,247.07 | $12,107 | $14,858 | $164,817 |
| $164,817 | $2,247.07 | $11,032 | $15,932 | $148,885 |
| $148,885 | $2,247.07 | $9,881 | $17,084 | $131,801 |
| $131,801 | $2,247.07 | $8,646 | $18,319 | $113,482 |
| $113,482 | $2,247.07 | $7,321 | $19,643 | $93,838 |
| $93,838 | $2,247.07 | $5,901 | $21,063 | $72,775 |
| $72,775 | $2,247.07 | $4,379 | $22,586 | $50,189 |
| $50,189 | $2,247.07 | $2,746 | $24,219 | $25,970 |
| $25,970 | $2,247.07 | $995 | $25,970 | $0 |
Recommended: Home Loan Help Center
How to Get a $250,000 Mortgage
If the estimated monthly payments above fit your budget, proceed with the following steps to get a $250,000 mortgage. First, take stock of your financial situation and read up on tips to qualify for a mortgage before applying. Start by checking your credit score, calculating your debt-to-income (DTI) ratio, and evaluating your available savings for a down payment and closing costs. Lenders consider all these factors when reviewing a loan application. Ahead of time, prepare the documents you’ll need for the mortgage application, including bank statements, tax returns, and W-2s.
After comparing lenders and loan types, getting preapproved for a home loan is a logical next step. Mortgage preapproval from a lender shows the loan amount and interest rate you qualify for, helping inform your budget and demonstrate that you’re a serious buyer when putting in an offer on a property.
💡 Quick Tip: Generally, the lower your debt-to-income ratio, the better loan terms you’ll be offered. One way to improve your ratio is to increase your income (hello, side hustle!). Another way is to consolidate your debt and lower your monthly debt payments.
The Takeaway
The cost of taking out a $250,000 mortgage depends on the interest rate and loan term. A monthly $250,000 mortgage payment also includes taxes and insurance. To get a $250,000 mortgage, borrowers need to factor a down payment and closing costs into their homebuying budget.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
How much is a $250K mortgage a month?
The payment on a $250,000 mortgage with a 7% interest rate would be $1,663 a month for a 30-year term and $2,247 a month for a 15-year term. The down payment amount, property taxes, and insurance costs also impact the monthly mortgage payment.
How much income is required for $250,000 mortgage?
The required income for a $250,000 mortgage depends on several factors, including existing debt, down payment size, and interest rate. With a 20% down payment and 7% interest rate, an income of $77,710 or more would qualify for a $250K mortgage, provided you don’t have a lot of debt already.
How much is a down payment on a $250,000 mortgage?
The required down payment on $250,000 mortgages depends on the loan type and lender. FHA loans require down payments of 3.5% or 10%, while buyers could qualify for a conventional loan with as little as 3% down.
Can I afford a $250K house with a $70K salary?
You may be able to afford a $250,000 house with a $70,000 salary. Besides income, how much house you can afford depends on how much you are prepared to pay for a down payment and what your debt-to-income ratio is.
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circ*mstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
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