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Your Guide To A $450,000 Mortgage: Costs And Requirements To Consider

May 01, 2024 7-minute read

Author: Sarah Sharkey

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When buying a house, getting a home loan is a concern for most buyers. If you’re considering taking on a $450,000 mortgage, it’s important to understand how factors like loan terms and interest rates impact your homeownership costs.

What Is The Monthly Payment On A $450,000 Mortgage?

If you want to purchase a home with a $450,000 mortgage, the monthly payment can vary dramatically based on the loan term you choose and the attached interest rate.

 

The table below breaks down how much you can expect to pay each month on a $450,000 home loan. The monthly payment indicated includes the principal and interest component of your payment. But it doesn’t include any property taxes, mortgage insurance or homeowners insurance, which can vary based on your location and down payment amount.

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Interest Rate

Average Monthly Payment (30-Year Mortgage)

Average Monthly Payment (15-Year Mortgage)

5%

$2,415.70

$3,558.57

5.5%

$2,555.05

$3,676.88

6%

$2,697.98

$3,797.36

6.5%

$2,844.31

$3,919.98

7%

$2,993.86

$4,044.73

7.5%

$3,146.47

$4,171.56

8%

$3,301.94

$4,300.43

8.5%

$3,460.11

$4,431.33

What Is The Total Interest Paid On A $450,000 Mortgage?

The total amount of interest paid on a mortgage will vary based on the interest rate and the loan term. You’ll need to plug your numbers into an amortization schedule to map out exactly how much you’ll pay in interest over the course of the loan term. But in general, a shorter loan term leads to paying less in interest. 

For example, let’s say Pat is taking out a $450,000 home loan with a 6.5% interest rate 30-year loan term. Without making any extra payments, they will pay $573,950.20 in interest over the loan term. But if they opt for a 15-year loan term, with the same interest rate and loan amount, they would pay $255,596.97 in interest over the loan term.

Find out how much you can afford.

Your approval amount will give you an idea of the closing costs you’ll pay.

Amortization Schedule With A $450,000 Home Loan

An amortization schedule details how much of your monthly payment will go toward principal and interest over your loan term. As your loan ages, the amount of money put toward interest charges decreases, and the amount paid toward the loan balance increases.

The following tables show two different amortization schedules (30-year mortgage and 15-year mortgage) to illustrate how the payments work out.

Amortization Schedule For A 30-Year Loan Term

Here’s the breakdown of how payments stack up over a 30-year loan term for a $450,000 home loan with a 6.5% interest rate.

Year

Starting Balance

Estimated Monthly Payment

Interest Paid

Principal Paid

Remaining Balance

1

$450,000

$2,844.31

$29,101.91

$5,029.76

$444,970.24

2

$444,970.24

$2,844.31

$28,765.06

$5,366.62

$439,603.62

3

$439,603.62

$2,844.31

$28,405.64

$5,726.03

$433,877.59

4

$433,877.59

$2,844.31

$28,022.16

$6,109.51

$427,768.08

5

$427,768.08

$2,844.31

$27,613.00

$6,518.68

$421,249.40

6

$421,249.40

$2,844.31

$27,176.43

$6,955.25

$414,294.15

7

$414,294.15

$2,844.31

$26,710.62

$7,421.05

$406,873.10

8

$406,873.10

$2,844.31

$26,213.62

$7,918.05

$398,955.05

9

$398,955.05

$2,844.31

$25,683.33

$8,448.34

$390,506.71

10

$390,506.71

$2,844.31

$25,117.53

$9,014.14

$381,492.57

11

$381,492.57

$2,844.31

$24,513.84

$9,617.83

$371,874.73

12

$371,874.73

$2,844.31

$23,869.71

$10,261.96

$361,612.78

13

$361,612.78

$2,844.31

$23,182.45

$10,949.22

$350,663.56

14

$350,663.56

$2,844.31

$22,449.16

$11,682.51

$338,981.05

15

$338,981.05

$2,844.31

$21,666.76

$12,464.91

$326,516.14

16

$326,516.14

$2,844.31

$20,831.97

$13,299.71

$313,216.43

17

$313,216.43

$2,844.31

$19,941.26

$14,190.41

$299,026.01

18

$299,026.01

$2,844.31

$18,990.90

$15,140.77

$283,885.24

19

$283,885.24

$2,844.31

$17,976.90

$16,154.78

$267,730.46

20

$267,730.46

$2,844.31

$16,894.98

$17,236.69

$250,493.77

21

$250,493.77

$2,844.31

$15,740.61

$18,391.07

$232,102.71

22

$232,102.71

$2,844.31

$14,508.92

$19,622.75

$212,479.96

23

$212,479.96

$2,844.31

$13,194.75

$20,936.92

$191,543.03

24

$191,543.03

$2,844.31

$11,792.57

$22,339.11

$169,203.93

25

$169,203.93

$2,844.31

$10,296.48

$23,835.20

$145,368.73

26

$145,368.73

$2,844.31

$8,700.19

$25,431.48

$119,937.24

27

$119,937.24

$2,844.31

$6,996.99

$27,134.68

$92,802.57

28

$92,802.57

$2,844.31

$5,179.73

$28,951.94

$63,850.63

29

$63,850.63

$2,844.31

$3,240.77

$30,890.90

$32,959.72

30

$32,959.72

$2,844.31

$1,171.95

$32,959.72

$0.00

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Amortization Schedule For A 15-Year Loan Term

Now, here’s a breakdown of how payments stack up over a 15-year loan term for a $450,000 home loan with a 6.5% interest rate.

Year

Starting Balance

Estimated Monthly Payment

Interest Paid

Principal Paid

Remaining Balance

1

$450,000

$3,919.98

$28,710.33

$18,329.47

$431,670.53

2

$431,670.53

$3,919.98

$27,482.77

$19,557.03

$412,113.50

3

$412,113.50

$3,919.98

$26,173.00

$20,866.80

$391,246.70

4

$391,246.70

$3,919.98

$24,775.51

$22,264.29

$368,982.41

5

$368,982.41

$3,919.98

$23,284.43

$23,755.37

$345,227.03

6

$345,227.03

$3,919.98

$21,693.49

$25,346.31

$319,880.72

7

$319,880.72

$3,919.98

$19,996.00

$27,043.80

$292,836.92

8

$292,836.92

$3,919.98

$18,184.82

$28,854.97

$263,981.95

9

$263,981.95

$3,919.98

$16,252.35

$30,787.45

$233,194.50

10

$233,194.50

$3,919.98

$14,190.46

$32,849.34

$200,345.16

11

$200,345.16

$3,919.98

$11,990.48

$35,049.32

$165,295.84

12

$165,295.84

$3,919.98

$9,643.16

$37,396.64

$127,899.21

13

$127,899.21

$3,919.98

$7,138.64

$39,901.16

$87,998.05

14

$87,998.05

$3,919.98

$4,466.38

$42,573.41

$45,424.63

15

$45,424.63

$3,919.98

$1,615.16

$45,424.63

$0.00

Can You Afford A $450,000 Mortgage?

Taking on a $450,000 mortgage is a significant financial decision. It’s important to know how to calculate home affordability before signing up for a long-term loan to ensure you don’t go over budget.

Monthly Payment

As a good rule of thumb, you shouldn’t spend more than 28% of your gross monthly income on your housing costs. Your monthly payment is a significant part of your housing costs. But you should also consider things like utilities, maintenance and insurance.

Down Payment

While buyers used to be expected to plunk down 20% of their purchase price as a down payment, that’s no longer necessary. If you wanted to put down 20%, that would add up to $90,000 for a home with a sale price of $450,000.

But the good news is that many home buyers can put down less. In some cases, the down payment isn’t even required. But for most buyers, you’ll need to put down at least 3%, which amounts to $13,500 for a home with a purchase price of $450,000.

Closing Costs

Closing costs are usually due on the day you finalize the home loan. In general, closing costs range from 3% to 6% of the purchase price. Let’s say the purchase price was $450,000 instead of the loan amount. In that case, you would expect to pay between $13,500 to $27,000 in closing costs.

Loan Term

The right loan term can make a big difference to your budget. In general, a longer loan term leads to a more affordable monthly payment. But you’ll get out of debt faster and pay less in interest if you opt for a shorter loan term.

Homeowner Costs

When you become a homeowner, you can expect various homeowner costs to eat into your budget. Typically, these costs include insurance, maintenance costs, property taxes and more.

If possible, estimate what your ongoing homeownership costs will be. But make sure to leave some buffer in your budget for unexpected home expenses.

What Are The Requirements For A $450,000 Home Loan?

Every lender has slightly different requirements for borrowers pursuing a $450,000 home loan. But, in general, lenders will look at details like your debt-to-income ratio (DTI), credit score and income. Of course, a higher credit score and lower DTI ratio may get better rates and terms.

How To Get A $450,000 Mortgage

If you’re interested in getting a $450,000 mortgage, use the steps below as a guide.

  1. Assess your financial situation. Start by taking a close look at your financial situation. It’s critical to make sure you can afford the purchase before making such a large financial commitment.
  2. Shop for a lender. If you’re confident that you can afford the loan, it’s time to shop for a lender that offers the loan type you have in mind. Additionally, look for a lender offering the most affordable rates.
  3. Prepare your documents. Having all the right documents in order can help you breeze through the mortgage application. You’ll need to provide details like your W-2s, bank statements and recent pay stubs.
  4. Fill out the mortgage application. With all of your documents on hand, it’s time to complete a mortgage application.
  5. Ask questions. It’s natural to have questions about such a major purchase, especially as a first-time home buyer. Don’t hesitate to ask questions during the loan process.
  6. Obtain mortgage preapproval. With a mortgage preapproval, you can get a better idea of what you can afford. From there, you can start searching for a property that suits your needs and your budget.

$450,000 Mortgage FAQs

You have questions about a $450,000 mortgage. We have answers.

How much does a $450,000 mortgage cost per month?

The exact monthly payment of a $450,000 home loan varies based on many factors, including the interest rate and loan term. But, in general, you should expect to pay between $2,400 and $4,500 per month based on today’s rates. However, this estimate can increase or decrease with rate fluctuations.

What income do I need to afford a $450,000 mortgage payment?

If you want a $450,000 mortgage, the exact income you need will vary based on the interest rate, loan term and other factors. But, in general, around 28% of your monthly income can go towards a mortgage payment. If your mortgage payment is around $3,000, you’d need to earn around $100,000 per year.

How much of a down payment should I make on a $450,000 home loan?

When buying a house, you may be able to make a down payment as low as 3%. For a house that cost $450,000, that amounts to a down payment of $13,500. If you prefer to put down 20%, that adds up to $90,000.

The Bottom Line: Calculate If A $450K Mortgage Is Right For You

A $450,000 mortgage will add a significant expense to your life. Before moving forward, make sure to run the numbers to confirm the mortgage payment fits into your budget. If you decide that a $450,000 mortgage suits your financial situation, then start the approval process today.

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Sarah Sharkey

Sarah Sharkey is a personal finance writer who enjoys diving into the details to help readers make savvy financial decisions. She’s covered mortgages, money management, insurance, budgeting, and more. She lives in Florida with her husband and dog. When she's not writing, she's outside exploring the coast. You can connect with her on LinkedIn.