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How much would a $300,000 mortgage cost monthly?
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Homebuying can be a stressful and complex process. But in the end, most buyers want to be rewarded with a home they care about for a price they can easily afford. To accomplish that goal, however, buyers will need to consider multiple factors, with their budget being the most important. This, too, can be particularly complex, especially now as the interest rate climate evolves and speculation over multiple interest rate cuts intensifies. Against this backdrop, it’s critically important that buyers understand what their payments will be, both if they act now and if they wait to buy later in 2024 or 2025.
With the average home price around $427,000 right now, many homebuyers throughout the United States may be wondering what a mortgage on the low end of that spectrum costs. Below, we’ll calculate exactly what a $300,000 mortgage will cost buyers who act now, as well as it would that payment could look like once rate cuts reverberate through the market.
Start by seeing how low of a mortgage interest rate you could secure here.
How much would a $300,000 mortgage cost monthly?
Mortgage interest rates, while still more than double what they were at the height of the pandemic, have been slowly declining as inflation has cooled and talk of rate cuts has grown. That’s left them more than a full percentage point lower than they were toward the end of 2023, for example. Here’s what a $300,000 monthly mortgage payment would be at today’s rates, accounting for the conventional 20% down payment ($60,000) and excluding homeowners insurance and taxes:
- 15-year mortgage at 5.86%: $2,007.15 per month
- 30-year mortgage at 6.44%: $1,507.51 per month
But while a 25 basis point reduction to the federal funds rate may not mirror exactly what homebuyers can get from lenders, it’s still important to know how much payments at the lower rate would be to determine if it’s worth waiting. Here’s how they could drop if rates fall by 25 basis points:
- 15-year mortgage at 5.61%: $1,975.04 per month
- 30-year mortgage at 6.19%: $1,468.37 per month
And here’s what mortgage payments would be on a $300,000 mortgage if rates drop a half a percentage point, either later this month or cumulatively in the months ahead:
- 15-year mortgage at 5.36%: $1,943.22 per month
- 30-year mortgage at 5.94%: $1,429.68 per month
So you could potentially save more than $50 each month if you wait for mortgage interest rates to drop. But waiting could provide another set of complications, including increased competition for limited housing inventory and rising prices as sellers take advantage of a rejuvenated market. It’s critical, then, to weigh these scenarios as accurately as possible to determine if waiting for a mortgage rate cut actually makes sense for you.
Learn more about your current mortgage rate options here.
What about 15-year mortgages?
15-year mortgage payments, no matter the mortgage origination amount, will always be more expensive than 30-year terms thanks to the condensed time frame. But if you’re looking for the lowest mortgage interest rate possible, as the above examples show, 15-year mortgages are more than half a percentage point lower than their 30-year loan counterparts now. And you’ll save significant sums of interest over the life of the mortgage thanks to that abbreviated payoff. Plus, if you pay for mortgage points on a 15-year option, you may be able to secure an even lower rate than what’s advertised for qualified borrowers. Yes, 15-year mortgages aren’t for everyone, but in today’s rapidly changing economic climate, they’re at least worth investigating.
The bottom line
A $300,000 mortgage loan comes with affordable monthly payments now and the inherent possibility of lower payments soon if buyers prefer to act then instead. But waiting could bring its own complications, including additional competition and possibly higher home prices. So buyers will need to add all of these factors into their final decision – along with exploring the pros and cons of 15-year mortgages, as well – in order to best determine their best strategy.
Have more questions? See what mortgage rates and terms you qualify for online now.
Police arrested a man on murder charges this month, 14 years after he allegedly killed a man in Virginia, but the victim’s body has never been found.
Shane Ryan Donahue, a Virginia man, is presumed deceased, the Prince William County Police Department said Tuesday. He was last seen leaving his parents’ home in Nokesville, Virginia, on March 22, 2010. Donahue, 23, was headed to his house in Nokesville, but never made it there.
Donahue was added to the National Missing and Unidentified Persons System after he vanished. According to records, Donahue did not have a car and regularly got rides from friends. He frequented Washington, D.C., Baltimore, Fauquier County, Virginia, and Northern Virginia.
The case stumped investigators, who followed a number of leads over the years. This spring, detectives reactivated the investigation and started looking at every detail of the case from scratch, officials said. They revisited people who had been interviewed during the initial investigation and reviewed “digital evidence in greater detail due to advances in analytical technology and modern police investigative practices,” according to a news release.
Officers said Donahue was last seen leaving his parents’ home with Timothy Sean Hickerson, now a 43-year-old Florida resident. Investigators connected Hickerson to a burglary at Donahue’s home that happened just days before the Virginia man disappeared.
Detectives got an arrest warrant this month and, with the help of Florida’s Flagler County Sheriff’s Office, Hickerson was taken into custody in Palm Coast, Florida. Hickerson was charged with murder and burglary, is now set to be extradited to Virginia.
Former President Donald Trump, an avowed proponent of tax cuts, is floating the idea of reversing a measure passed during his tenure in the White House that effectively raised taxes for many U.S. homeowners.
In a post Tuesday on Truth Social, Trump suggested he would scrap a $10,000 cap on deducting state and local taxes (SALT) that was passed as part of the 2017 Tax Cuts and Jobs Act — a massive revamp that he has said boosted economic growth.
Now, in the run-up to the November election, Trump said in the post he would “get SALT back, lower your taxes, and so much more,” although he stopped short of offering details. Trump made the post ahead of a speech he’s giving Wednesday at the Nassau Coliseum on Long Island.
Trump’s new proposal for getting rid of his $10,000 SALT deduction cap comes as the presidential hopeful is pitching several additional tax cuts that would, if enacted, reduce taxes for major groups of voters. He’s also vowed to eliminate taxes on Social Security benefits, a pledge that could get support from the nation’s senior citizens, as well as to end income taxes on tipped workers and on overtime pay, ideas that would help lower- and middle-income Americans.
Yet Trump’s reversal on the SALT deduction has sparked skepticism from lawmakers as well as economists and policy experts.
“So … now Trump is against the SALT tax cap which *checks notes* is a key part of the — only — major piece of legislation passed during his administration?” noted Chris Koski, a political science professor at Reed College in Portland, Oregon, on X.
Rep. Tom Suozzi, a Democrat from Nassau, Queens, said in a statement on Wednesday that he is “happy that the former president is saying that he has finally reversed his devastating decision in 2017 to cap the State and Local Tax (SALT) deduction.” He also urged Trump to convince Republican lawmakers to vote to restore the full deduction “if he is truly serious.”
The SALT deduction cap “has been a body blow to my constituents for the past 7 years,” Suozzi added.
Senator Chuck Schumer, a Democrat from New York, wrote on X,”Donald Trump took away your SALT dedications and hurt so many Long Island families. Now, he’s coming to Long Island to pretend he supports SALT. It won’t work.”
Asked for details about Trump’s proposal to restore the SALT writeoff, a spokeswoman for the Trump campaign told CBS MoneyWatch: “While his pro-growth, pro-energy policies will make life affordable again, President Trump is also going to quickly move tax relief for working people and seniors.”
Here’s what to know about the SALT deduction.
What is the SALT deduction?
The state and local tax deduction allows taxpayers who itemize to deduct property taxes, sales taxes and state or local income taxes from their federal income taxes. Prior to the Tax Cuts and Jobs Act, there was no limit on how much people could deduct through the SALT deduction.
But the 2017 tax overhaul passed under Trump limited the deduction to $10,000 – a blow to many homeowners in states with high property taxes, many of which are Democratic leaning. At the time of the law’s passage, the Treasury Department estimated that almost 11 million taxpayers in high-tax states like New York and New Jersey would forfeit $323 billion in deductions.
Who benefits from the SALT deduction?
Homeowners with high property taxes, such as people in New York, New Jersey and California, were the biggest beneficiaries of the the full SALT deduction.
But some experts also noted that the SALT deduction primarily put more money in the pockets of higher-earning Americans. About 80% of the full SALT deduction had helped people earning more than $100,000 a year, according to the Tax Foundation.
What happened after Trump capped the SALT deduction at $10,000?
The limit has increasingly impacted middle-class homeowners across the U.S. because of rising property taxes and incomes. Some lawmakers have also sought to either repeal or increase the SALT cap, but none of those efforts have borne fruit.
Earlier this year, some lawmakers sought to double the SALT deduction cap to $20,000 for married couples, with the change retroactive for the 2023 tax year. But that bill was blocked in the House in February.
Won’t the SALT deduction cap expire anyway?
Yes, the SALT deduction cap is a provision that’s due to expire in 2025, as are many other parts of the Tax Cuts and Jobs Act, such as a reduction of the individual tax brackets. But Trump has previously indicated he wants to extend the provisions in his signature tax law.
How much would it cost the U.S. to repeal the SALT deduction cap?
It won’t be cheap, according to the the Committee for a Responsible Federal Budget, a think tank that focuses on budget and policy issues.
Eliminating the $10,000 deduction limit “would increase the cost of extending the 2017 Tax Cuts and Jobs Act (TCJA) by $1.2 trillion over a decade,” the group estimates, adding that such a measure would be a “costly mistake.”
Extending the TCJA’s tax cuts would increase the nation’s deficit by $3.9 trillion over the next decade, the group estimates. By adding in a expiration or repeal of the SALT deduction cap, that would grow to $5.1 trillion, it added.
“Lawmakers should not extend the TCJA without a plan to – at a minimum – offset the costs of extension, but ideally the plan would raise revenues relative to current law and help put the nation’s debt on a better trajectory,” the group said in a statement.
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