How Much a $400,000 Mortgage Will Cost You Each Month (2024)

A $400,000 mortgage comes with a variety of costs in addition to your monthly payment. These costs may be significant, so it’s important to weigh them carefully before applying for the loan.

Knowing what to expect will ensure you can comfortably afford the mortgage — both now and over the long haul. Let's learn more about how much a $400,000 mortgage will cost you throughout the life of the loan.

Monthly payments for a $400,000 mortgage

On a $400,000 mortgage with an interest rate of 6%, your monthly payment would be $2,398 for a 30-year loan and $3,375 for a 15-year one.

Keep in mind: Monthly mortgage payments don’t just go toward lowering your loan balance, but also toward several other expenses, too — like taxes and insurance, for example.

Here’s a look at what generally goes into a mortgage payment:

• Principal: This is a portion of your payment that goes straight toward reducing your balance. It’s typically a very small share of your payment at the start of your loan.
• Interest: This covers the cost of borrowing your loan. It’s usually the largest share of your payment for the first few years of your loan.
• Escrow costs: Most lenders require an escrow account to stow away cash for property taxes and homeowners insurance. You’ll pay money into this account each month as part of your mortgage payment.

Here’s a quick look at what the monthly principal and interest payment would be for a $400,000 mortgage with varying rates:

Where to get a $400,000 mortgage

Shopping around for your mortgage is critical if you want to get the lowest interest rate. To do this, you’ll need to apply with several mortgage lenders directly.

Once you have a few loan estimates in hand, you can compare the costs of each lender one by one. Make sure to look at the APR, origination fee, mortgage points, and the total cash you’ll need to bring to closing.

From there, you can choose the best offer, proceed with the lender’s full application, and provide any financial documentation they might require.

What to consider before applying for a $400,000 mortgage

Before you take out a $400,000 mortgage, you’ll need to understand the total costs of the loan.

You should know what your closing costs and monthly payment will be, how much you’ll need for a down payment, and the total interest you’ll pay over time.

Total interest paid on a $400,000 mortgage

The total interest you’ll pay will depend on both your APR and the length of your loan. Longer loan terms and higher APRs will result in more interest costs in the long run.

On a 15-year, $400,000 mortgage loan with a 6% interest rate, for example, you’d pay $207,577 in total interest by the end of your loan term.

On a 30-year loan with the same details, your interest costs would jump to $463,353 — a shocking $255,776 more.

Check Out: How To Buy a House: Step-by-Step Guide

Amortization schedule on a $400,000 mortgage

An amortization schedule, which breaks down the principal and interest payments for a loan, can help you understand the long-term costs of your mortgage.

As you’ll see below, the bulk of your payments will go toward interest costs initially. Once you get further into your loan term, more of your payments go toward your loan balance, and you’ll start reducing that principal at a faster rate.

Here’s what an amortization schedule looks like for a 30-year, $400,000 mortgage with an APR of 6%:

Here’s what an amortization schedule looks like for a 15-year, $400,000 mortgage with an APR of 6%:

How to get a $400,000 mortgage

When filling out your mortgage application, you’ll want to have some financial details on hand, including your income, estimated credit score, homebuying budget, and info regarding your assets and savings.

Follow these simple steps to apply for a mortgage:

1. Estimate your budget: Figure out how much home you can afford first. Use our mortgage calculator to estimate your monthly payment for different loan amounts, and make sure you factor in insurance, taxes, homeowners association (HOA) dues, maintenance, and other costs, too. This can help guide you toward the right price range to shop in.
2. Pull your credit report: Your credit score and your overall credit history will heavily impact your loan offers. Request a copy of your credit report early to gauge where you stand. If you see any late payments or accounts in collections, work on settling these before applying for your loan.
3. Get pre-approved for your loan: You’ll want to get pre-approved for a mortgage before beginning your home search. Not only can a pre-approval letter give you a good idea of what you may be able to borrow from a lender, but it can also give sellers more confidence in your offers.
4. Compare rates and loan offers: Once you’re pre-approved, you can compare those letters — and the loan estimates they come with — and choose the best lender for your home purchase. Be sure to look carefully at the numbers, including the interest rate, APR, closing costs, and any fees.
5. Find a home and make an offer: When you’ve found that dream home, put in an offer, and negotiate the details. If the seller accepts, you can proceed with your chosen mortgage lender’s full application.
6. Fill out your mortgage application: Complete your mortgage application, and submit any documentation the lender requires. Be prepared to provide recent tax returns, W-2s, and pay stubs.
7. Wait for approval: Your loan application will be processed and underwritten. During underwriting, your lender will verify your financial information and make sure you can repay the loan.
8. Get ready for closing: Once your loan nears approval, you’ll be scheduled for a closing date. To prepare, you’ll want to find a homeowners insurance policy, review your final closing disclosures, and arrange your payment, which is usually done via wire transfer or cashier’s check.

Close on your loan: You’ll eventually attend your closing appointment, sign your paperwork, and pay your down payment and closing costs. Once you’re finished, you’ll get your keys and can move into the home.

Monthly payments for different mortgage amounts

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Frequently asked questions

What down payment do I need for a $400,000 loan?

If you’re planning to put down 20%, you’d need to save $80,000. Some mortgage lenders might approve you with a down payment as low as 3%, which would be $12,000. You might need to get private mortgage insurance if you put down less than 20%, so check with your lender to see what’s required.

Can I afford a $400,000 mortgage on a $100,000 salary?

To determine whether a mortgage payment is affordable, you can use the 28% rule — a guideline that recommends you put no more than 28% of your gross monthly income toward housing expenses. First, calculate your pre-tax monthly income ($100,000/12 = $8,333.33). Then, multiply your monthly income by 28% to find an affordable payment ($8,333.33 x 0.28 = $2,333.33). Using $2,333 as a target, you can use a mortgage calculator to test different interest rates, down payments, and loan terms to find a scenario that would be most affordable for you.