Taking out a $300,000 mortgage comes with many costs — some upfront and some paid over long lengths of time. The length of your loan’s term will heavily influence your total expenses.
For a traditional 15- or 30-year loan of this size, you might pay anywhere from $155,683 to $347,515 in total interest.
Monthly payments for a $300,000 mortgage
Monthly mortgage payments consist of principal and interest. In some cases, they might include other costs as well.
Here’s what typically makes up a mortgage payment:
- Principal: This money is applied straight to your loan balance.
- Interest: This is the cost of borrowing the money. How much you’ll pay is indicated by your interest rate.
- Escrow costs: If you opt to use an escrow account (or your lender requires it), you’ll also have your property taxes, mortgage insurance, and homeowners insurance rolled into your monthly mortgage payment.
On a $300,000 mortgage with a 6% annual percentage rate (APR), you’d pay $2,531.57 per month on a 15-year loan and $1,798.65 on a 30-year loan, not including escrow. Escrow costs vary depending on your home’s location, insurer, and other details.
Here’s a quick look at what the monthly payment (principal and interest) would be for a $300,000 mortgage with varying interest rates:
Annual percentage rate (APR) | (15-year) | (30-year) |
|---|---|---|
6.00% | ||
6.25% | ||
6.50% | ||
6.75% | ||
7.00% | ||
7.25% | ||
7.50% | ||
7.75% | ||
8.00% |
Where to get a $300,000 mortgage
To get a $300,000 home loan, you’ll want to get quotes from several lenders. Though this can be done by reaching out to each mortgage company directly, you can also compare lender options with an online marketplace like Credible.
Expert tip:
“Compare offers from different types of mortgage lenders too, such as local or national banks, credit unions and online lenders." — Valerie Morris, Editor, Mortgages
Once you receive your quotes, compare the interest rate, total costs on closing day, any origination fees, mortgage points you’re being charged, and more.
After you determine the best offer, you can move forward with that lender’s application and submit any required documentation.
Credible makes the process of comparing lender options easier — and it only takes a few minutes.
What to consider before applying for a $300,000 mortgage
Before taking out a $300,000 mortgage, you’ll want to have a good handle on the total costs of the loan. That includes your closing costs, the down payment, the total interest you’ll pay, and the monthly payment the loan comes with.
Total interest paid on a $300,000 mortgage
You’ll pay more interest on longer-term loans. So, for example, a 30-year loan would cost more in the long haul than a 15-year one would (though the 30-year loan would have a smaller monthly payment).
With a 30-year, $300,000 loan at a 6% interest rate, you’d pay $347,514.57 in total interest, and on a 15-year loan with the same rate, it’d be $155,682.69 — a whopping $191,831.88 less.
Use our mortgage payment calculator to see how much interest you’ll pay, as well as what your home will cost you every month.
Amortization schedule on a $300,000 mortgage
An amortization schedule breaks down how much you’ll pay in interest and principal for every year of your loan’s term.
At the start of your loan, the bulk of your monthly payments will go toward interest, but as you get further into the loan term, more will be applied to the principal balance.
Here’s what an amortization schedule looks like for a 30-year, $300,000 mortgage with a 6% APR:
Here’s what an amortization schedule looks like for a 15-year, $300,000 mortgage with a 6% APR:
How to get a $300,000 mortgage
When filling out your mortgage application, you’ll want to have some financial details on hand, including your income, estimated credit score, homebuying budget, and info regarding your assets and savings. Here’s how to get a mortgage:
Step-by-step guide to the mortgage process:
- Estimate your homebuying budget: Take a look at your finances, including your earnings, debts, and monthly expenses, and determine what you can afford in terms of home price, down payment, and monthly payments. A mortgage affordability calculator can help you set a budget.
- Do a credit check: Both your credit history and your credit score will play a major part in your loan application, so pull your credit report and evaluate your standing. If you have late payments, collections efforts, or other negative events on your report, you may want to work on addressing those before applying, as they could hurt your chances.
- Get pre-approved: It helps to get pre-approved for a mortgage before searching for a home. A pre-approval letter can give you a good price range to shop in, as well as give sellers more confidence in your offers.
- Compare rates and mortgage offers: Next, you’ll want to compare options. Pay close attention to the interest rate and APR you’re being offered, the closing costs, and any fees the lender is charging.
- Find and make an offer on a home: When you find a home you want to buy, be sure to include your pre-approval letter in your offer, and work with an experienced real estate agent to get the best deal.
- Complete the full mortgage application: After your offer has been accepted, fill out your lender’s full mortgage application and submit the documentation it requires. This usually includes tax returns, bank statements, pay stubs, and more. You will also need to agree to a credit check.
- Await approval: Your loan will then go into underwriting, which is when your lender verifies your income, savings, and other assets and makes sure you can repay the loan. The lender will also order an appraisal to gauge the home’s value (and make sure it’s worth the money you’re requesting to borrow for it).
- Get ready for closing: Once your loan is nearing full approval, you’ll get a closing date, which is when you’ll sign the final paperwork and receive your keys. You’ll typically need proof of homeowners insurance by this day, so be sure to shop around for your policy early.
- Close on your loan: When closing day rolls around, you’ll attend your appointment, sign the required paperwork, and submit your down payment and closing costs (usually via cashier’s check or wire transfer).
Frequently asked questions
How much do I need to earn to afford a $300,000 mortgage?
Many lenders will require your housing expenses to not exceed 28% of your gross monthly income. They want to make sure you’ll be able to repay the loan without overextending your budget. You can enter different interest rates and terms into a mortgage calculator to estimate a payment that would fit your budget.
Can I afford a $300,000 mortgage with a $75,000 salary?
To calculate how affordable a mortgage payment would be, you can start by figuring out what 28% of your gross monthly income is and use that as a benchmark. Divide your $75,000 salary by 12 to get a monthly income of $6,250. Multiply that by 28% to get a rough idea of the affordable amount ($6,250 x 0.28 = $1,750). You might have to shop around for a lower interest rate or make a larger down payment to secure a $300,000 loan with a monthly payment no higher than $1,750.
What down payment do I need for a $300,000 home?
Making a down payment of 20% can help you avoid buying private mortgage insurance (PMI). If you want to put down 20%, you’d need to save up $60,000. Some mortgage lenders have lower minimum down payment requirements of 3% or 5%, if you don’t mind paying for PMI. A 3% to 5% down payment would cost $9,000 to $15,000.
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