Buying a home is a major financial commitment, and understanding how to budget for a $100,000 property is essential. As of August 30, 2024, the national average 30-year mortgage rate is 6.53%, according to Bankrate. However, your actual rate will depend on factors like your credit history and financial situation.
To get a better idea of what you can afford, use a mortgage calculator. Enter different loan amounts, interest rates, and loan terms to estimate your monthly payment and overall cost.
Monthly mortgage payment calculator
A mortgage calculator helps determine your estimated monthly payments based on loan amount, term length, and interest rate.
Simply input your details and click “Calculate” to see your estimated monthly payment. You can also compare lenders to find the best mortgage rates available.
Estimated monthly payments by interest rate
Your monthly mortgage payment depends on your interest rate and loan term. Below is an estimate of what you might pay for a $100,000 mortgage:
- At 7.00% interest:
- 30-year loan: $665 per month
- 15-year loan: $899 per month
- At 6.50% interest:
- 30-year loan: $632 per month
- 15-year loan: $871 per month
- At 8.00% interest:
- 30-year loan: $734 per month
- 15-year loan: $956 per month
Shorter loan terms generally mean higher monthly payments but significantly lower overall interest costs.
Total interest paid on a $100,000 mortgage
The length of your loan has a big impact on the total interest paid:
- 30-year loan at 7.00% interest: $139,509 in total interest
- 15-year loan at 7.00% interest: $61,789 in total interest
By choosing a shorter loan term, you can save tens of thousands in interest over the life of the mortgage.
How much income do you need to afford a $100,000 home?
Financial experts recommend keeping your mortgage payment within 28% to 30% of your monthly household income.
If you make a 20% down payment ($20,000), your mortgage loan will be $80,000. To afford this, you’d need a minimum monthly income of around $1,418 or an annual income of about $17,000. However, this calculation does not include other homeownership costs like property taxes, insurance, and maintenance.
Understanding amortization
Amortization is how your loan balance decreases over time. Initially, a larger portion of your monthly payment goes toward interest. Over time, more of your payment applies to the principal balance.
For example, on a 30-year, $100,000 mortgage at 7.00% interest:
- Year 1: You pay $6,968 in interest and $1,016 toward the principal.
- Year 10: Interest drops to $6,080, while your principal repayment increases to $1,904.
- Year 30: Your final year’s payment includes just $295 in interest, with the remaining $7,689 going toward the principal.
A shorter loan term shifts more of your payment to the principal sooner, reducing the total interest paid.
Comparing mortgage lenders
Finding the right lender is just as important as choosing the right loan. Some lenders offer better rates, lower fees, or more flexible terms. Popular loan options include conventional, FHA, VA, and USDA loans, each catering to different borrower needs.
For example, Veterans United specializes in VA loans for military members and requires a minimum credit score of 620.
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