Estimating monthly costs: Mortgage for a $600,000 house

Quick insights

• The monthly payment on a $600,000 house can be estimated using a standard formula, the interest rate and the overall loan term.
• The size of your down payment can make a significant impact on your monthly costs; A larger down payment may make monthly payments more affordable.
• Exploring hypotheticals can help you get preliminary answers about affordability in your home-buying budget; However, there are many additional factors which may only be observed in a real loan offer.

If you’re planning to buy a home, you know that one of the most critical questions is how much home your budget will allow for. In this article, we’ll review important estimates involved in buying a $600,000 home. We’ll show how to estimate the monthly payment, explain costs to expect and identify important steps for getting a $600,000 home.

Calculating the monthly payment: Mortgage on a $600,000 house

If you’re preparing to take on a mortgage on a $600,000 house, you will also need to know the interest rate and length of the loan (term) to estimate monthly costs. Let's consider a hypothetical conventional mortgage on a $600,000 home. With the formula below, you can estimate the monthly payment size (principal plus interest):

M = P[ r(1+r)n ] / [ (1+r)n−1 ]

• P represents the loan principal: Purchase price minus any down payment.
• r is the monthly interest rate: The annual rate divided by 12 months.
• n is the number of payments: The number of years multiplied 12 months.

Assuming a 20% down payment, the formula for a 30-year 6.5% fixed-rate mortgage would result in a monthly principal and interest payment of roughly $3,030. If only the term were shorted to 15 years, the monthly payment would change to about $4,180.

How a down payment can affect monthly costs

Although our initial calculation did not include a down payment, it would be unusual to purchase a home without one. It’s common for a down payment to be up to 20%, made in cash at the time of sale. Lower payments could be accepted and change the monthly payment. In fact, adjusting any of the three major factors in the formula above will produce a different monthly payment.

Other monthly costs worth estimating

The standard mortgage payment formula does not include variable expenses, such as private mortgage insurance (PMI), property taxes or homeowner’s insurance. Homebuyers who make a downpayment that is 20% or less of the home’s purchase price often need to pay for PMI. This is often included as an additional expense on top of monthly mortgage payments until you reach 20% equity in your home.

Although these costs vary, they’re worth estimating when planning for the monthly costs of homeownership. To get closer estimates, you’ll need to dig into local figures where you’re planning to buy a home and check with specific lenders. A specific mortgage calculator could help, as well.

Upfront costs to plan for when buying a home

As you prepare to buy a home, there are other costs you may want to plan for, including closing costs, PMI, escrow costs and moving expenses.

• Closing costs: Closing costs are an assortment of expenses that are added up and paid during the homebuying transaction. These could include things like appraisal fees, home inspection fees, attorney fees prepaid interest and title insurance. In total, closing costs typically amount to 2–5% of the home's purchase price.closing-costs-calc-fannie-mae-2025 For a $600,000 home, 2–5% closing costs would be $12,000–30,000.
• Additional escrow costs: Some lenders require several months of expenses to be deposited into an escrow account at the time of purchase. These expenses could include the first few months of property taxes, homeowners insurance, mortgage insurance or prepaid interest.

Estimating how much you pay over the life of a mortgage loan

Calculating how much interest you’ll pay over the course of a loan can clarify the impact of the interest rate and loan term. The down payment is another significant factor, but these approximate calculations will assume a 20% down payment ($480,000 loan principal):

15-year mortgage loan with 6.5% interest rate

• Cost over 15 years: $752,640
• Total interest paid: $272,640

30-year mortgage loan with 6.5% interest rate

• Cost over 30 years: $1,090,210
• Total interest paid: $612,210

15-year mortgage loan with 8% interest rate

• Cost over 15 years: $825,680
• Total interest paid: $345,680

30-year mortgage loan with 8% interest rate

• Cost over 30 years: $1,267,950
• Total interest paid: $787,950

How to get a $600,000 house

Here are several important parts of the homebuying process:

• Assess your finances: Using the formula above, you can calculate the potential monthly payment size required. Consider how much you have in savings and whether that is likely to cover all up-front expenses. Finally, you may want to assess your credit score and debt-to-income ratio (DTI), which are often decision-making factors for lenders.
• Preapproval: Being preapproved for a loan can help solidify your budget for the purchase and make you look more serious to sellers when you begin touring homes. Pre-approval typically includes submitting financial documents including bank statements.
• Find your home: Armed with your budget, begin looking for homes in your ideal location. When you’ve found a home that fits your criteria, make your offer—either independently or with the assistance of a professional real estate agent.
• Finalize your loan: Once your offer has been accepted, you will need to complete a formal loan application and provide any additional information requested by the lender. The lender’s underwriting team will review your application (and often the home’s appraised value) before providing the formal loan offer.
• Closing: During the closing process, you will be presented with a closing disclosure which outlines all costs related to your purchase. At the closing meeting, you will be required to pay any agreed-upon upfront costs. Your loan will then be funded, and you’ll receive your keys.

Bottom line

So, how much will a monthly payment be for a $600,000 house? By now, you know that there are numerous factors that can affect this calculation. Using your own numbers in affordability calculations can help you explore different hypotheticals as you narrow down your budget. Consider using Chase’s mortgage affordability calculatoraffordability_calculator_hl000009 or meeting with one of our Home Lending Advisors for further information.