Homeownership isn’t just an exciting concept, it’s also a major step toward a financially stable lifestyle. After all, when you own your home, you don’t have to worry about rising rent prices. And, as the value of your home grows, and you make your mortgage payments, you’ll build equity. 

Then again, buying a home is a big decision. And, it’s important that you can confidently make your monthly mortgage payments. If not, you could lose your home and the financial stability it represents. 

As of March 2024, the average American home price was $393,500. And today’s average 30-year mortgage rate is 7.32%. But what does that mean in terms of monthly mortgage payments? How much would you need to pay per month if you purchased the average American home at today’s mortgage rates? That’s what we will calculate below.

Find out how affordable your mortgage could be now. 

How much would the monthly payment be on the average American home?

There are several variables that play a role in your monthly mortgage payments. For example, the amount of money you borrow, your interest rate and your mortgage term are all factors that have an impact on the total amount of money you’ll pay monthly. Here’s how much you would have to pay per month for the average American home based on the term of the mortgage you choose and the down payment you make: 

• 30-year mortgage with 20% down: If you put 20% down on a $393,500 home ($78,700), you mortgage amount would be $314,800. At the average 30-year mortgage rate of 7.32%, your monthly mortgage payments would be $2,162.46. 
• 30-year mortgage with $0 down: If you financed the entire cost of a $393,500 home with a 30-year mortgage at 7.32%, your monthly mortgage payments would be $2,703.07. 
• 15-year mortgage with 20% down: The average 15-year mortgage rate is currently 6.75%. If you put 20% down and financed the remaining $314,800 of your purchase with a 15-year mortgage at 6.75%, your monthly payments would be $2,785.69. 
• 15-year mortgage with 0% down: If you financed the entire cost of a $393,500 home with a 15-year mortgage at 6.75%, your monthly payments would be $3,482.12. 

Don’t wait for mortgage rates and monthly payments to rise. Lock in today’s mortgage rates now. 

Why you should lock in your mortgage rate now

Debating whether to lock in your mortgage rate now or wait? Here’s why you may want to lock it in now: 

• Persistent inflation continues: The most effective way the Federal Reserve can combat inflation is by increasing its federal funds rate (the benchmark rate for consumer interest rates). And, since inflation has run hot thus far in 2024, higher rates could be ahead. By locking in your mortgage rate now, you can avoid any potential rate hikes in the future. 
• A better deal may be available: As buyers sit on the sidelines waiting for rates to fall, you may have less competition to contend with. As a result, sellers may be more open to negotiations – which means you could get a better deal on the price of your home if you buy now than you would if you wait. 
• You’re not building equity if you don’t own your home: If you’re renting a home or apartment while you wait to buy one of your own, you’re not building any equity. You’re simply paying to occupy space. But, when you buy your home, you’ll start building equity – a meaningful step toward long-term financial stability.  

Take advantage of the benefits of homeownership today. 

The bottom line

The average American home loan will cost anywhere from $2,162.46 to $3,482.12 per month, depending on the term of your mortgage and the down payment you make. Of course, that’s assuming that your mortgage comes with today’s average mortgage rate. 

Nonetheless, it’s a wise idea to purchase your home now. If inflation continues, mortgage rates could go up – increasing the monthly cost of the average American home. Moreover, with some buyers waiting for lower mortgage rates before they enter the market, you may have less competition to contend with, which could mean you’ll save money on the price of your home. Not to mention, until you own your home, your monthly payments do nothing in terms of building equity. 

Compare your mortgage options now to take advantage of the benefits of buying a home today. 

Joshua Rodriguez

Joshua Rodriguez is a personal finance and investing writer with a passion for his craft. When he’s not working, he enjoys time with his wife, two kids, two dogs and two ducks.