Mortgage interest rates are falling again. After hitting their highest level since 2000 last summer when the 30-year mortgage loan hit 7.31%, rates are around 6.50% now, nearly a full point lower than what borrowers could have secured last August. And with a consistently cooling inflation rate (it dropped for the fourth month in a row in July), a cut to the federal funds rate appears likely when the Federal Reserve meets again in September. While that cut may be just 25 basis points then, additional cuts later in the year could result in multiple reductions in mortgage interest rates, too.

Against this backdrop, many homebuyers stuck waiting for rates to fall may be considering re-entering the homebuying market again. While there are multiple ways to prepare for mortgage interest rate cuts, perhaps the most important is to calculate your potential costs, both at today’s readily available rates – and what they could be by the time you’re ready to close on a home. 

For those considering a mortgage of $600,000, then, it’s critical to start calculating now, before making an offer. Below, we’ll determine how much a $600,000 mortgage will cost per month if purchased now, and what you could save if you wait a bit longer.

See how low of a mortgage interest rate you could secure here now.

How much would a $600,000 mortgage cost per month?

There are multiple factors to consider when calculating the costs of a $600,000 mortgage, with the most important being the interest rate and the down payment amount. For the below calculations, we assumed a 20% down payment ($120,000), without which you’ll get stuck paying private mortgage insurance (PMI) until you have that much equity in the home. The following calculations do not account for taxes and homeowners insurance, which can vary greatly from home to home. Here’s what you could expect to pay monthly right now:

• 30-year mortgage at 6.53%: $3,043.40 per month 
• 15-year mortgage at 5.92%: $4,029.80 per month

While you’ll pay just under $1,000 more per month for a 15-year mortgage, you’ll pay off the loan in half the time, saving years’ worth of interest payments in the interim. But what will you pay once rates are cut? While lender offers won’t move directly in tandem with Fed rate cuts, here’s what payments would look like assuming a 25 basis point cut in September — and another 25 basis point cut when the Fed meets again in November:

• 30-year mortgage at 6.28%: $2,964.81 per month
• 15-year mortgage at 5.67%: $3,965.44 per month

• 30-year mortgage at 6.03%: $2,887.11 per month
• 15-year mortgage at 5.42%: $3,901.65 per month

So while today’s mortgage rates may result in manageable payments now, you could potentially save more than $100 per month if you wait for rates to cool further. But, again, that’s assuming rates will fall as the federal funds rate does, which isn’t always accurate. 

And, if you wait for the perfect rate, you could lose your dream home in the process. Finally, a cooling mortgage rate climate could complicate the homebuying process further as more buyers enter the market, thus increasing competition that may not be as strong right now. So it’s critical to compare your options today versus what could exist in the future to determine your best path forward.

Compare today’s mortgage options here to get a clearer picture.

The bottom line

Qualified borrowers could see a monthly mortgage payment of principal and interest between $3,043.80 and $4,029.80 for a $600,000 mortgage loan right now. But those payments could fall if they wait for the rate climate to cool further. Still, waiting for an ideal rate poses its own complications, which may not be outweighed by the $100-plus owners can save if they buy a home later in 2024, instead. The right answer will vary from buyer to buyer, so start crunching the numbers now to determine which makes more sense for your unique financial situation.

Get started here today.