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The total mortgage cost and monthly payment for a $400K home

PublishedJun 26, 2025

    Quick insights

    • The total cost of a $400,000 home depends on the details of the loan and property, but there is a formula for estimating monthly principal and interest.
    • Key parts of mortgage payment and lifetime cost calculations include the loan term, loan size and interest rate.
    • Understanding this calculation and other important costs of homeownership is worthwhile as you prepare to buy a home.

    Purchasing a home can be a thrilling milestone, and getting a mortgage for $400,000 home is a significant task. Regardless of a home’s price, the loan principal, interest rate and term length will be key in determining affordability. Fortunately, there’s a formula for calculating the monthly principal and interest mortgage payment.

    What is the monthly mortgage payment for a $400,000 home?

    Here’s the formula for calculating a mortgage payment (principal and interest):

    M = P[ r(1+r)n ] / [ (1+r)n−1 ]

    • P represents the loan principal.
    • r is the monthly interest rate.
    • n is the number of payments.

    The result will depend heavily on the loan amount, interest rate and term. The payment changes if any of these critical figures changes.

    Example calculation

    At a 6% fixed interest rate and 10% down payment, a 15-year conventional mortgage would have of a monthly payment around $3,040. Increase the down payment to 20%, and the monthly payment is about $2,700. Meanwhile, a 30-year conventional mortgage at the same 6% interest rate (and 20% down payment) would have a lower monthly payment of approximately $1,920.

    While a 30-year mortgage can help make monthly payments more manageable, this longer loan term means paying more in interest. A shorter loan term, such as 15 years, would reduce interest costs but require a higher monthly mortgage payment.

    What is the total cost of a mortgage on a $400,000 house?

    The total cost of a mortgage depends on factors like the loan term, interest rate and down payment. There are also factors that are harder to estimate, including homeowners insurance and property taxes. Just counting the principal and interest, here are several approximate estimates for the total cost of a $400,000 home:

    30-year fixed-rate mortgage, assuming 6% interest rate and 20% down payment

    • Lifetime cost: $690,680
    • Total interest paid: $370,690

    15-year fixed rate mortgage, assuming 6% interest rate and 20% down payment

    • Lifetime cost over 30 years: $486,060
    • Total interest paid: $166,060

    Potential monthly costs

    When estimating your monthly mortgage payment, most of that amount will probably be principal and interest. Additional common expenses are property taxes, homeowners insurance or private mortgage insurance (PMI). For conventional loans, a 20% down payment reduces the loan balance and usually eliminates the need to pay PMI. These additional monthly costs can vary and become clearer as you approach loan closing.

    Upfront costs to consider for a $400,000 home purchase

    • Down payment: Your down payment plays a major role in determining your loan amount, monthly payments and overall mortgage costs. A larger down payment could also help you secure a lower interest rate, potentially saving thousands of dollars over the life of the loan.
    • Closing costs: These can range from 2% to 5% of the loan amount. Remember, there are various key factors that can influence how much home you can afford when applying for a mortgage.ec-closing-cost-calc

    How much should I make to afford a $400K home?

    To comfortably afford a $400,000 home, your income is only one part of the equation. Loan providers assess your debt-to-income (DTI) ratio, which includes existing debts, such as student loans, credit card balances and car payments. Lenders generally review mortgage applications considering a full financial picture.

    To get a clearer estimate of what fits within your budget, consider using a mortgage affordability calculator.affordability_calculator_hl000009

    How to buy a $400,000 home

    Getting a $400,000 home involves multiple pertinent steps, from evaluating your finances to closing on your home. Here are some of the most common parts of the process:

    • Assess your finances: Review your income, DTI ratio and savings to determine affordability. Having a clear and current budget will also help you through the rest of the process, including your home search.
    • Get preapproved: A preapproval letter can strengthen your offer with verified financial documents. This part of the process can also demonstrate what a lender believes you can afford based on your recent financials.
    • Submit a mortgage application: Provide required documents like W-2s, tax returns and bank statements. Loan providers verify your finances and property value.
    • Receive final approval and close: This should provide final monthly and upfront costs for your $400,000 home so you know what you’re signing when you reach the settlement table.

    In summary

    Securing a mortgage for a $400,000 property involves careful financial planning. When estimating a monthly payment, your down payment, interest rate and loan term are among the most important figures to know. The upfront costs and other potential monthly expenses are also important factors.

    The property details, personal financials and lender will affect the final numbers. Using a specific mortgage calculator or consulting with a Home Lending Advisor can help with the process.

    Take the first step and get preapprovedaffordability_hl000008

    Have questions? Connect with a home lending expert today!

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