$2,528 a month on a $400,000 mortgage at 6.5% over 30 years — principal and interest only.
The actual bill will be closer to $3,200–3,400, because principal and interest is the part a rate table can calculate and the smaller part of what leaves your account.
By rate, 30-year fixed
| Rate | Monthly P&I | Total interest over 30 yrs |
|---|---|---|
| 5.0% | $2,147 | $373,023 |
| 5.5% | $2,271 | $417,616 |
| 6.0% | $2,398 | $463,353 |
| 6.5% | $2,528 | $510,178 |
| 7.0% | $2,661 | $558,036 |
| 7.5% | $2,797 | $606,869 |
| 8.0% | $2,935 | $656,621 |
Half a percentage point is about $130 a month and $47,000 over the life of the loan. That is the entire argument for shopping more than one lender.
At 6.5% the interest paid over thirty years exceeds the amount borrowed.
What the calculator leaves out
| Component | Typical monthly on a $400k loan |
|---|---|
| Principal & interest | $2,528 |
| Property tax | $330–$830 |
| Homeowner's insurance | $85–$250 |
| PMI (if under 20% down) | $130–$250 |
| HOA (if applicable) | $0–$400 |
| Realistic total | $3,100–$4,000 |
Property tax is the biggest variable and it is geographic. Effective rates run from roughly 0.3% of value in the lowest states to over 2% in the highest. On a $500,000 home that is $1,500 a year against $10,000 — a $700 monthly difference on the same loan, the same rate and the same payment table.
PMI disappears; tax and insurance do not. Private mortgage insurance drops off around 20% equity. The other two rise with assessments and premiums.
By loan amount, at 6.5%
| Loan | Monthly P&I |
|---|---|
| $200,000 | $1,264 |
| $300,000 | $1,896 |
| $400,000 | $2,528 |
| $500,000 | $3,160 |
| $600,000 | $3,792 |
| $750,000 | $4,741 |
Payment scales linearly with the amount at a fixed rate, so $6.32 per $1,000 borrowed at 6.5% over 30 years is a usable shortcut for any figure.
Term changes the shape completely
| Term | Monthly | Total interest |
|---|---|---|
| 15 years | $3,484 | $227,197 |
| 20 years | $2,982 | $315,750 |
| 30 years | $2,528 | $510,178 |
Fifteen years costs $956 more a month and saves $283,000 in interest. Whether that is a good trade depends on what the $956 would otherwise do, which is a different question from which loan is cheaper.
The formula behind every row:
M = P × r(1+r)^n / ((1+r)^n − 1)
r = annual rate ÷ 12 n = months
Buying the rate down
A discount point costs 1% of the loan — $4,000 on $400,000 — and typically lowers the rate by about a quarter of a percentage point. At 6.5% that quarter point is roughly $65 a month.
The question is only how long you keep the loan. Four thousand dollars divided by sixty-five is about sixty-two months: past five years the points have paid for themselves, before that they have not. Sell or refinance in year three and the money is gone.
Most borrowers do not keep a thirty-year mortgage for thirty years. The median is closer to a decade, which is long enough for points to pay off and short enough that the calculation is worth doing rather than assuming.
A lender credit runs the same arithmetic backwards: a higher rate in exchange for cash toward closing costs. It is the right trade for someone who expects to move or refinance soon and the wrong one for someone staying put.
Fixed against adjustable
An adjustable-rate mortgage quotes a lower rate for an initial fixed period, commonly five, seven or ten years, then adjusts on a schedule against an index.
The figure that matters is not the starting rate but the caps: how much the rate can move at the first adjustment, at each subsequent one, and over the life of the loan. A 5/1 ARM with 2/2/5 caps starting at 5.5% can reach 10.5% and the payment can go from $2,271 to $3,634.
That is survivable if the plan is to be gone before the first adjustment, and it is the whole risk if the plan changes. Fixed-rate borrowers pay a premium for the certainty; whether that premium is worth it is a question about your own timeline, not about rate forecasts.
Where the money actually goes early on
At 6.5%, the first payment on $400,000 is about $2,167 interest and $361 principal. Fourteen percent of it reduces the debt.
The crossover — the month where principal first exceeds interest — arrives around year 18 on a 30-year loan at this rate. That asymmetry is why an extra payment made in year two is worth many times the same payment made in year twenty, and it is the whole subject of amortisation.
Whether $2,528 is affordable is a separate calculation with its own rules: see what income supports what payment. Car loans use the identical formula over a much shorter term, which changes the answer entirely.