Homebuyers waiting for mortgage interest rates to finally fall may not have to wait much longer.

After hitting their highest point since 2000 last summer, mortgage interest rates have come down by more than a full percentage point since. And now they’re poised to drop further. With a consistently cooling inflation rate and a tick-up in unemployment, the Federal Reserve is set to issue its first cut to the federal funds rate in four years. When it does, mortgage interest rates could experience another drop, too.

Understanding this changing dynamic is key for homebuyers entering the market right now. However, there are critical steps to take before making an offer on a home, with budget calculation at the top of the list. With the average home price around $427,000 right now, many buyers may be wondering what a $450,000 mortgage could cost them each month. Below, we’ll calculate those potential costs right now – and what they could look like once interest rates are cut.

See how low of a mortgage interest rate you can secure here today.

How much would a $450,000 mortgage cost per month?

The following calculations don’t account for homeowners insurance, state and local taxes and private mortgage insurance (PMI), all of which can vary greatly depending on your specific borrower profile. Here’s what the principal and interest payments would be on a $450,000 mortgage, assuming you used the traditional 20% down payment ($90,000):

• 15-year mortgage at 5.86%: $3,010.72 per month
• 30-year mortgage at 6.44%: $2,261.26 per month

And while mortgage interest rates won’t likely fall directly in tandem with the federal funds rate, here’s what borrowers could expect to pay with a 25 basis point reduction:

• 15-year mortgage at 5.61%: $2,962.56 per month
• 30-year mortgage at 6.19%: $2,202.55 per month

And here’s what they could pay if today’s rates are cut by half a percentage point:

• 15-year mortgage at 5.36%: $2,914.82 per month
• 30-year mortgage at 5.94%: $2,144.51 per month

So not only are mortgage payments on a $450,000 mortgage loan affordable this September, but they’re likely to become less expensive as the year goes on, making now the best time to buy a home in multiple years.

Learn more about your current mortgage rate options online now.

Don’t forget about other costs

While the above figures account for the principal and interest you’d pay on a $450,000 mortgage, minus the down payment, those figures alone won’t represent your total monthly payment to your lender. Homeowners insurance can be paid upfront every year or added to your mortgage and paid by the lender for you, which could raise your monthly costs by a significant amount. Taxes can also cause that payment to rise, particularly when local assessments are completed. So be sure to ask the seller what they’re currently paying for insurance (including coverage amounts) and taxes now to better determine precisely what your potential mortgage payment will be in the future.

The bottom line

A $450,000 mortgage payment could cost qualified borrowers between $2,261.26 and $3,010.72 per month, depending on the loan term chosen. But that figure doesn’t account for interest rate cuts to come, which could result in lower payments. But it also doesn’t account for insurance and tax expenses, which could result in higher payments. So be sure to do your research and calculate all prospective expenses before agreeing to borrow this much from a lender.

Start calculating your potential home loan costs here.