The total cost of a mortgage depends on the loan term and the interest rate. For a $250,000 mortgage with a 30-year term and 6.25% interest rate, borrowers can expect a monthly mortgage payment around $1,539 a month.
However, there are other mortgage costs to consider — both at closing and over the life of the loan. Here’s a look at the factors that affect how much your mortgage costs, as well as what you can expect to pay for a $250,000 mortgage.
Table of Contents
Key Points
• A $250,000 mortgage cost depends on the interest rate and loan term, with a 30-year term at 6.25% resulting in a monthly payment of about $1,539.
• The total cost involves more than just the principal and interest; it also includes a down payment, closing costs, and potential private mortgage insurance.
• Property taxes, homeowners insurance premiums, and private mortgage insurance are often paid as part of the monthly mortgage payment.
• Choosing a shorter loan term, like 15 years, significantly increases the monthly payment but saves a substantial amount of interest over the life of the loan
• To obtain a $250,000 mortgage, buyers should check their credit score, take steps to reduce debt, save for all upfront costs, and shop around with multiple lenders for the best rate.
Cost of a $250,000 Mortgage
The cost of a $250,000 mortgage is more than just the borrowed amount, known as the loan principal. While borrowers repay the principal, they are also required to pay interest, calculated as a percentage of the loan amount, to cover the cost of issuing the loan. A percentage point difference in interest rate could bump up a $250,000 mortgage payment by $100 or more a month, significantly increasing the total interest paid over the life of the loan.
Most mortgages require a down payment, with the exception of VA loans and USDA loans. The minimum down payment depends on the type of loan and a borrower’s financial situation. For example, the required down payment on a FHA loan is 3.5% for borrowers with credit scores of at least 580 versus 10% for borrowers with credit scores between 500 and 579.
The down payment amount also impacts the total cost of home mortgage loans. Homeowners will be on the hook for paying private mortgage insurance (PMI) with their monthly payments unless they put 20% or more down. PMI is usually 0.5% to 1.5% of the loan principal per year, spread across monthly mortgage payments.
Buying a house also involves closing costs, typically ranging from 3% to 6% of the loan principal. For a $250,000 mortgage, closing costs would likely be between $7,500 and $15,000. If saving up for both the down payment and closing proves to be a challenge, buyers might explore down payment assistance programs.
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Monthly Payments for a $250,000 Mortgage
Figuring out how much you can afford to spend on housing each month is an essential step to determining your homebuying budget. Monthly mortgage payments typically include four components: loan principal, interest, taxes, and insurance.
Assuming a 30-year fixed term and an interest rate of 6.25%, a $250,000 mortgage monthly payment would amount to $1,539 for the loan principal and interest, as noted above. Choosing a 15-year loan term with a 6.25% interest rate would translate to a monthly mortgage payment of $2,144. Note that these figures do not include property taxes and insurance. Taxes vary according to your property’s assessed value, as well as by location — so the cost of living by state is another factor buyers must consider.
Initially, the majority of the monthly mortgage payment goes toward interest rather than paying off the loan principal. Over time, a greater share of the mortgage payment is applied to the principal balance, helping build equity in your home.
For a more detailed look at what a $250,000 mortgage payment amounts to, using a mortgage calculator or home affordability calculator lets you experiment with different down payments, interest rates, and loan terms.
đź’ˇ Quick Tip: If you refinance your mortgage and shorten your loan term, you could save a substantial amount in interest over the lifetime of the loan.
Where to Get a $250,000 Mortgage
The majority of U.S. homebuyers use a mortgage loan to finance their home purchase. Buyers can get a $250,000 mortgage from a variety of lenders, including banks, credit unions, mortgage brokers, and online lenders. Shopping around and looking at multiple lenders is recommended to help secure a lower interest rate and save thousands over the life of a mortgage. Besides the interest rate, examine the differences in fees, mortgage points, and expected closing costs when comparing lenders.
There are also different types of mortgage loans to consider. Your mortgage loan options depend in part on your location, veteran status, down payment size, and whether you qualify as a first-time homebuyer. For comparison, here’s the mortgage amortization schedule on a 30-year mortgage vs. a 15-year loan. In both cases we are assuming a $250,000 mortgage with a 7% fixed rate. Looking at a $250,000 mortgage payment 30 years’ out, borrowers would pay $194,284 more in interest payments than with a 15-year term.
Amortization schedule, 30-year mortgage at 7%
| Beginning Balance | Monthly Payment | Total Interest Paid | Total Principal Paid | Remaining Balance |
| $250,000 | $1,663.26 | $17,420 | $2,540 | $247,460 |
| $247,460 | $1,663.26 | $17,236 | $2,723 | $244,737 |
| $244,737 | $1,663.26 | $17,038 | $2,920 | $241,817 |
| $241,817 | $1,663.26 | $16,828 | $3,131 | $238,686 |
| $238,686 | $1,663.26 | $16,602 | $3,357 | $235,329 |
| $235,329 | $1,663.26 | $16,359 | $3,600 | $231,729 |
| $231,729 | $1,663.26 | $16,099 | $3,860 | $227,869 |
| $227,869 | $1,663.26 | $15,820 | $4,139 | $223,729 |
| $223,729 | $1,663.26 | $15,520 | $4,439 | $219,290 |
| $219,290 | $1,663.26 | $15,200 | $4,760 | $214,531 |
| $214,531 | $1,663.26 | $14,855 | $5,104 | $209,427 |
| $209,427 | $1,663.26 | $14,487 | $5,473 | $203,955 |
| $203,955 | $1,663.26 | $14,091 | $5,868 | $198,087 |
| $198,087 | $1,663.26 | $13,667 | $6,292 | $191,794 |
| $191,794 | $1,663.26 | $13,212 | $6,747 | $185,047 |
| $185,047 | $1,663.26 | $12,724 | $7,235 | $177,812 |
| $177,812 | $1,663.26 | $12,201 | $7,758 | $170,054 |
| $170,054 | $1,663.26 | $11,640 | $8,319 | $161,735 |
| $161,735 | $1,663.26 | $11,039 | $8,920 | $152,815 |
| $152,815 | $1,663.26 | $10,394 | $9,565 | $143,250 |
| $143,250 | $1,663.26 | $9,703 | $10,256 | $132,994 |
| $132,994 | $1,663.26 | $8,961 | $10,998 | $121,996 |
| $121,996 | $1,663.26 | $8,166 | $11,793 | $110,203 |
| $110,203 | $1,663.26 | $7,314 | $12,645 | $97,557 |
| $97,557 | $1,663.26 | $6,399 | $13,560 | $83,998 |
| $83,998 | $1,663.26 | $5,419 | $14,540 | $69,458 |
| $69,458 | $1,663.26 | $4,368 | $15,591 | $53,867 |
| $53,867 | $1,663.26 | $3,241 | $16,748 | $37,149 |
| $37,149 | $1,663.26 | $2,033 | $17,927 | $19,222 |
| $19,222 | $1,663.26 | $737 | $19,222 | $0 |
Amortization schedule, 15-year mortgage at 7%
| Beginning Balance | Monthly Payment | Total Interest Paid | Total Principal Paid | Remaining Balance |
| $250,000 | $2,247.07 | $17,190 | $9,774 | $240,226 |
| $240,226 | $2,247.07 | $16,484 | $10,481 | $229,744 |
| $229,744 | $2,247.07 | $15,726 | $11,239 | $218,506 |
| $218,506 | $2,247.07 | $14,914 | $12,051 | $206,454 |
| $206,454 | $2,247.07 | $14,042 | $12,922 | $193,532 |
| $193,532 | $2,247.07 | $13,108 | $13,857 | $179,675 |
| $179,675 | $2,247.07 | $12,107 | $14,858 | $164,817 |
| $164,817 | $2,247.07 | $11,032 | $15,932 | $148,885 |
| $148,885 | $2,247.07 | $9,881 | $17,084 | $131,801 |
| $131,801 | $2,247.07 | $8,646 | $18,319 | $113,482 |
| $113,482 | $2,247.07 | $7,321 | $19,643 | $93,838 |
| $93,838 | $2,247.07 | $5,901 | $21,063 | $72,775 |
| $72,775 | $2,247.07 | $4,379 | $22,586 | $50,189 |
| $50,189 | $2,247.07 | $2,746 | $24,219 | $25,970 |
| $25,970 | $2,247.07 | $995 | $25,970 | $0 |
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How to Get a $250,000 Mortgage
If the estimated monthly payments above fit your budget, proceed with the following steps to get a $250,000 mortgage. First, take stock of your financial situation and read up on tips to qualify for a mortgage before applying. Start by checking your credit score, calculating your debt-to-income (DTI) ratio, and evaluating your available savings for a down payment and closing costs. Lenders consider all these factors when reviewing a loan application. Ahead of time, prepare the documents you’ll need for the mortgage application, including bank statements, tax returns, and W-2s.
After comparing lenders and loan types, getting preapproved for a home loan is a logical next step. Mortgage preapproval from a lender shows the loan amount and interest rate you qualify for, helping inform your budget and demonstrate that you’re a serious buyer when putting in an offer on a property.
💡 Quick Tip: Generally, the lower your debt-to-income ratio, the better loan terms you’ll be offered. One way to improve your ratio is to increase your income (hello, side hustle!). Another way is to consolidate your debt and lower your monthly debt payments.
The Takeaway
The cost of taking out a $250,000 mortgage depends on the interest rate and loan term. A monthly $250,000 mortgage payment often will also include taxes and insurance. To get a $250,000 mortgage, borrowers need to factor a down payment and closing costs into their homebuying budget.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
How much is a $250K mortgage a month?
The payment on a $250,000 mortgage with a 6.50% interest rate would be $1,580 a month for a 30-year term and $2,178 a month for a 15-year term. The down payment amount, property taxes, and insurance costs also impact the monthly mortgage payment.
How much income is required for a $250,000 mortgage?
The required income for a $250,000 mortgage depends on several factors, including existing debt, down payment size, and interest rate. With a 20% down payment and 7% interest rate, an income of $77,710 or more would qualify for a $250,000 mortgage, provided you don’t have a lot of debt already.
How much is a down payment on a $250,000 mortgage?
The required down payment on $250,000 mortgages depends on the loan type and lender. FHA loans require down payments of 3.5% or 10%, while some buyers could qualify for a conventional loan with as little as 3% down.
Can I afford a $250K house with a $70K salary?
You may be able to afford a $250,000 house with a $70,000 salary. Besides income, how much house you can afford depends on how much you are prepared to pay for a down payment and what your debt-to-income ratio is.
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