$350,000 mortgage: Total cost and how to manage it

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Any figures, interest rates, loan examples, and market data referenced in this article are hypothetical or aggregated for educational purposes only. They are not intended to reflect current pricing, available terms, or personalized loan options for any consumer. This content does not constitute an advertisement of credit terms, a solicitation or offer to extend credit, or a rate quote under federal or state lending laws. Actual mortgage rates and terms are determined by individual financial qualifications, property characteristics, market conditions, and other factors, and are subject to change without notice.

If you are seeking current, real-time mortgage rate information please refer to the official live rate information and product details published at RocketMortgage.com/rates, where current pricing and various loan terms are made available.

Most homeowners take out a mortgage from a lender to borrow enough funds to purchase a home. Aside from paying the principal amount you borrowed, plus interest, your monthly mortgage payment typically includes mortgage insurance and property taxes.

Understanding exactly what goes into the total cost of a mortgage will help you budget properly when it comes to time to financing a home.

What’s included in a monthly mortgage payment?

Your monthly mortgage payment is more than the principal and interest and depends on the type of loan you borrow.

Some of these expenses include:

• Principal: The principal is the total amount you borrowed from your mortgage lender.
• Interest: This amount is what the lender charges as the cost of borrowing money. It’s usually based on a percentage of the principal.
• Homeowners insurance: Most lenders require homeowners insurance, which provides financial protection against covered events, like natural disasters and accidents that happen on your property.
• Property taxes: Your local government charges annual property taxes, which is based on the assessed value of your home.
• Mortgage insurance: Your lender may require private mortgage insurance (PMI) for a conventional loan if you have less than 20% equity in the home. Many government backed loans also require mortgage insurance that’s added onto your monthly payment. This expense benefits the lender in case you default on the loan.

Monthly payments on a $350,000 mortgage

Your monthly payment on a $350,000 mortgage will depend on factors like your interest rate, location, loan type, and repayment term.

To help you visualize your estimated monthly payment, the following table illustrates what you could pay each month for a conventional mortgage. The figures assume that you made a 3% down payment¹ and don’t include insurance and taxes.

Because factors like your location and interest rate influence monthly payment amounts, consider using the Rocket Mortgage mortgage calculator to get a more accurate estimate.

What influences how much you’ll pay

Your mortgage payment is influenced by more than the loan amount and interest rate. Lenders will also charge other fees and take other factors into consideration that could affect the long-term cost of your overall loan.

The size of your down payment

Your down payment is the amount you pay out of pocket toward your loan, and lowers the amount you need to borrow. The higher your down payment, the lower your principal amount will be.

Your payment amount will depend on the type of loan you have. Most conventional loans require a minimum of 3%, but it could mean you’ll pay PMI until you reach 20% equity.

Government-backed loans like USDA and VA loans don’t have a down payment requirement, whereas FHA loans require a 3.5% minimum. If you’re unsure how to come up with the funds, your local or state government may have down payment assistance programs available.

Whether you have mortgage insurance

Mortgage insurance is based on a percentage of your loan amount.

Some government-backed loans like FHA loans typically require you to pay this expense throughout the life of the loan. With conventional loans, you can get rid of PMI when your home equity reaches 20% or you make a 20% down payment up front.

Your loan’s terms

Opting for a shorter repayment term typically means a higher monthly payment because you’re shortening the time you’re paying off the loan. With a longer term your payment may be lower, but you could pay more in interest overall.

Carefully consider the pros and cons of the loan term you want before making a decision.

Whether your rate is fixed or adjustable

A fixed-rate mortgage means that your interest rate remains the same throughout your loan. With an adjustable-rate mortgage (ARM), your initial rate will remain the same for a predetermined period of time. Afterward, the rate could fluctuate based on overall economic conditions.

Both fixed- and variable-rate mortgages have their advantages and disadvantages.

Your credit score and other qualifications

When you apply for a loan, lenders will review your credit and financial profile to assess your borrowing risk. This process is also known as underwriting. Your credit score is one major factor, as are as your income and debt levels.

The lower your risk as a borrower, the more likely your application will be approved at more competitive rates. That’s why it’s important to fully understand your financial profile and what lenders are looking for before applying.

What you pay at closing

Closing costs are fees you pay up front when taking out a mortgage and closing on your home. The amount you pay is typically 2% – 5% of your loan amount. Your lender will send a Closing Disclosure that outlines the details of your loan, including closing costs.

How much interest could you pay on a $350,000 mortgage?

Factors that affect your total interest payment include your interest rate, loan amount, and repayment term. You can see how much interest you’ll pay by looking at an amortization schedule.

Mortgage amortization is the process of repaying a loan through scheduled payments that are divided between principal and interest. Over time, a larger portion of each payment goes toward the principal while the interest portion decreases. To better understand how much in interest you’ll pay each month and the total amount you’ll pay overall, use our amortization calculator.

How to get a $350,000 mortgage

The steps to get a $350,000 mortgage are the same as applying for one at another amount. You’ll first need to determine what type of loan you want and get preapproved. That way, you’ll understand how much house you can afford. Getting a preapproval letter will also help show lenders you’re serious about purchasing a home.

Work with a real estate agent once you have a housing budget, then start to tour homes. Once you put an offer on a home and the seller agrees, you’ll begin the full application process with the lender. Steps include submitting documentation to the lender, agreeing to a hard credit inquiry, and preparing for other fees before closing on the home.

FAQ about $350,000 mortgages

Let’s take a look at some of the most frequently asked questions about a $350K mortgage.

What will the monthly payment be on a $350,000 mortgage?

The monthly payment on a $350,000 mortgage depends on your interest rate, repayment term, property tax and insurance payment amounts. Other factors like any mortgage insurance payment will also affect your payment amount.

How much will the down payment be for a $350,000 mortgage?

Your down payment is based on the loan type and what your lender requires. For example, VA and USDA loans don’t require a down payment. Conventional loans usually require a minimum of 3%, which is around $10,500 on a $350,000 loan.

What credit score do I need to get a $350,000 mortgage?

Different lenders have their own credit score requirements for borrowers looking for a $350,000 mortgage. For example, most conventional loan lenders want at least a 620 credit score, whereas FHA loans have a minimum 500 credit score. Speak with your lender to see what they’re looking for.

What salary do I need to afford a $350,000 mortgage?

Lenders may have income requirements, which is based on a percentage of your loan amount. They typically want you to spend no more than 28% of your gross income on your housing costs, and no more than 36% on overall debt payments, including your mortgage.                         

Use our home affordability calculator to assess how much you can afford based on your salary.

When should I consider getting a smaller mortgage?

Consider getting a smaller mortgage if you believe you can’t comfortably afford it alongside your other regular expenses. Evaluate your financial situation and ensure that a $350,000 mortgage is right for you.

The bottom line: Know your numbers before committing to a mortgage

Understanding your financial situation and what you can reasonably afford in a home is key before taking out a mortgage. Take the time to assess your budget and estimate costs to see whether you can cover all of your housing costs. You don’t want to be in a situation where you’ve taken out a mortgage and find yourself struggling to make payments.

In the market for a home? Get the preapproval process started with Rocket Mortgage to see much you can borrow before shopping for a home.

¹ The 3% down payment option is only available on certain conventional loan products and is not available in all states. Additional terms and conditions may apply.

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