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A $200,000 mortgage might cost you more than twice that amount over the course of the loan’s lifetime. That’s thanks in part to the way banks amortize, or parse out the balance of interest to principal in each payment. Of course, how much your specific $200,000 mortgage will cost is a more complicated equation, since personal financial factors like your credit score and debt level will affect your interest rate. And your interest rate, in turn, will affect your total mortgage cost.

Read on for a peek into the mortgage payment on $200K, including sample amortization tables, how much your monthly payment might cost, where to find a loan, and more.

Here’s What a $200,000 Mortgage Costs

When you take out a loan of any kind, the lending institution — often a bank — charges you for the service of giving you the money you need up front. When you repay a loan, you’re repaying both principal (the money you borrowed) and interest (the money the loan servicer is charging you).

Interest is expressed as a rate in the form of a percentage. Higher interest means you’re paying more for the loan — and lower interest, of course, means you’ll pay less. The lowest interest rates are reserved for buyers with the best financial profiles, which may include factors like robust and steady income, a good or excellent credit score, and a low level of existing debt (another factor lenders express in the form of a percentage: DTI, or your debt-to-income ratio).

With all that said, let’s say you take out a $200,000 mortgage to pay for a house that costs $275,000. In this example, you’d have made a down payment of $75,000, or just over 27%. Over the course of a 30-year mortgage term, with a fixed interest rate of 6%, you’d pay almost $232,000 in interest — along with the principal repayment, of course, bringing your total amount paid to almost $432,000. You’ll notice that figure is more than double the original $200,000 you borrowed, and this example doesn’t even include additional fees like property tax or homeowners insurance.

However, interest rates are very powerful here, and even a small decrease in interest can have a big effect on the overall loan cost. For example, imagine everything we’ve just described above remains the same, but your interest rate is 4% rather than 6%. In that scenario, your total interest would be about $143,000, representing a savings of around $90,000. (Insert shocked emoji.)

As you can see, finding the most favorable interest rates possible is really worthwhile for homebuyers. If this is your first time in the home market, a home loan help center can educate you about the buying process.


💡 Quick Tip: You deserve a more zen mortgage. Look for a mortgage lender who’s dedicated to closing your loan on time.

How Much Are Monthly Payments for a $200,000 Mortgage?

Maybe you’re less concerned about how much your $200,000 mortgage will cost you over the long term but are curious about the monthly payment on a $200K mortgage. Again, interest rates have a big effect on monthly mortgage payments, as does the loan’s term (how long you have to repay it). Still, we can offer a few examples.

For a 30-year $200,000 mortgage at a fixed interest rate of 7%, your monthly payments would be about $1,330 (though this figure doesn’t include property taxes or homeowners insurance, which could push your payment hundreds of dollars upward).

For a 15-year $200,000 mortgage with the same interest rate, your monthly payments would be about $1,797 (again, without additional costs included).

You can get more specific figures customized to your circumstances using a mortgage calculator or home affordability calculator online.

Where You Can Get a $200,000 Mortgage

There are ways to get a $200,000 mortgage if you’re sure you’re ready for one. Private banks, credit unions, and lenders who specialize in mortgages are all available to meet your request. You can usually do most of the application online.

One caveat: As we’ve seen above, interest rates can make a huge difference when it comes to the cost of your mortgage over time. Although market factors have a big influence on interest rates, your personal markers also matter, so getting your financial ducks in a row as possible before applying could help you save money in the long run. (So can finding an affordable place to live in the first place.) Additionally, you may want to ask for prequalification quotes from a variety of lenders to see who can give you the best deal.

Recommended: Tips to Qualify for a Mortgage

What to Consider Before Getting a $200,000 Mortgage: Amortization

Remember how we were talking about amortization above? In most cases, lenders amortize loans in such a way that, toward the beginning of the loan, the bulk of your payments are going toward interest. (Although your fixed monthly payments never change, the proportion of how much of that amount goes toward interest versus principal can.)

To understand how this can impact your ability to build equity, we’ve included the following sample amortization schedules for two different types of mortgage loans below. As you’ll see, the remaining principal balance goes down far more slowly than the amount you pay in. For example, in the chart below, although you’d pay a total of almost $16,000 toward your mortgage, the principal only reduces by about $2,000 because nearly $14,000 of your payments go toward interest.

Amortization Schedule, 30-year, 7% Fixed

As you can see, even 20 years into the loan’s 30-year lifespan, you’ll still be paying more toward interest than principal (though the proportion will be much closer to 50/50 than at the beginning of the term).

Next, let’s look at what happens when the home mortgage loan term is reduced to 15 years.

Amortization Schedule, 15-year, 7% Fixed

As this chart shows, a mortgage loan with a shorter term can help you build equity more quickly: Notice how principal and interest payments are much closer to equal just five years in, or a third of the way through the loan. Keep in mind that this ability comes at the cost of a higher monthly payment, though, so it may not be possible for all — especially first-time homebuyers who may struggle to meet higher mortgage payments.


💡 Quick Tip: If you refinance your mortgage and shorten your loan term, you could save a substantial amount in interest over the lifetime of the loan.

How Do I Get a $200,000 Mortgage?

Taking out a $200,000 mortgage is a fairly simple process these days. In most cases, your lender can pre-qualify you online or over the phone. While applying for your official approval will take a few more steps, including providing documentation like income verification and tax returns, you can still be approved in as little as a business day—and ready to take over the keys to your dream home.

To get started, reach out to the lender you’ve chosen to learn more about their process. They may make it simple to start your application online. Just don’t forget that interest adds up, and amortization can make it more difficult to build equity quickly. It’s worth checking in to ensure your lender doesn’t charge an early repayment penalty, and that they make it simple to pay additional principal if you’re able.

Recommended: The Cost of Living By State

The Takeaway

Because of interest, a $200,000 mortgage might cost more than $200,000 on top of the principal you borrow. It all depends on your loan term as well as your specific rate — which in turn depends on your financial standing.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

How much does a $200K mortgage cost each month?

With a fixed rate of 7%, a 30-year $200,000 mortgage will cost about $1,330 per month before additional fees, and a 15-year $200,000 mortgage at the same rate will cost closer to $1,800. If your down payment is less than 20% you will likely have to pay for mortgage insurance as well, not to mention property taxes and insurance.

How much income is required to qualify for a $200,000 mortgage?

An income of around $65,000 is in the right ballpark to qualify for a $200,000 mortgage. Income is far from the only important factor lenders consider when qualifying you for a loan, however, and even those who make substantial income may not qualify if they have high levels of debt or other negative factors.

How much is the down payment for a $200,000 mortgage?

Down payment amounts can vary substantially. Some loans allow you to put down as little as 3.5%, which, for a $200,000 home would be $7,000. To avoid having to pay for mortgage insurance, you’d want to put down at least 20%, which is $40,000.

Can I afford a $200K house with a salary of $70K?

What you can and can’t afford is a complex calculation that depends on your lifestyle, where you live, and more. That said, $70,000 is within the feasible range to take out a $200,000 mortgage, particularly if you choose a longer loan term.

Photo credit: iStock/skynesher

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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A $150,000 mortgage will cost a total of $341,318 over the lifetime of the loan, assuming an interest rate of 6.5% and a 30-year term. It might be tempting to think that a $150,000 mortgage will cost…well, $150,000. But lenders need to earn a living for their services and mortgage loans come with interest.

What’s the True Cost of a $150,000 Mortgage?

The specific price you will pay to borrow $150,000 depends on your interest rate — which, in turn, is based on a wide range of factors including your credit score, income stability, and much more. Here’s what you need to know to get an estimate of how much a $150,000 home mortgage loan might cost in your specific circumstances.


💡 Quick Tip: If you refinance your mortgage and shorten your loan term, you could save a substantial amount in interest over the lifetime of the loan.

Where Do You Get a $150,000 Mortgage?

Good news: There are many banks and institutions that offer $150,000 mortgages. For 2024, the maximum amount for most conventional loans is more than $750,000, so the loan you’re considering is well within reach. To see how your salary, debts, and down payment savings affect how much home you can afford, use a home affordability calculator.

However, it’s important to understand that even a $150,000 mortgage may cost far more than the sticker price after interest and associated fees. For instance, let’s say you purchase a $200,000 home with a 25% down payment and a $150,000 mortgage. If your interest rate is 7% and your loan term is 30 years, the total amount you’d pay over that time is $359,263.35 — which means you’d actually pay more than the home price ($209,263.35) in interest alone. (And that’s before closing costs, home insurance, property taxes, or mortgage insurance.)

At prices like that, it may seem like taking out a mortgage at all is a bad deal. Fortunately, property has a tendency to increase in value (or appreciate) over time, which helps offset the overall cost of interest. (Of course, nothing is guaranteed.)

Keep in mind that you can potentially lower the interest rate you qualify for by lowering your debt-to-income (DTI) ratio, improving your credit score, or increasing your cash flow by getting a better-paying job. Even a small decrease in interest can have a big effect over the lifetime of a loan. In our example above, with all else being equal, you’d pay only $139,883.68 in interest if your rate were 5% instead of 7% — a savings of nearly $70,000!

Recommended: The Best Affordable Places to Live in the U.S.

Monthly Payments for a $150,000 Mortgage

When you take out a $150,000 mortgage, you’ll repay it over time in monthly installments — of a fixed amount, if you have a fixed mortgage, or amounts that can change if you take out a variable rate loan.

Your monthly $150K mortgage payment includes both principal (the amount you borrowed) and interest (the amount you’re being charged), and may also wrap in your property taxes, homeowners insurance, and mortgage insurance if applicable. (You’ll only need to pay mortgage insurance if your down payment is less than 20%.)

But there is another caveat here that some first-time homebuyers don’t know about. Even if your mortgage payments are fixed each month, the proportion of how much principal you’re paying to how much interest you’re paying does change over time — a process known as the amortization of the loan. It’s a big word, but its bottom line is simple: Earlier on in the loan’s life, you’re likely paying more interest than principal, which increases the amount of money the bank earns overall. Later on in the loan, you’ll usually pay more principal than interest.

What to Consider Before Applying for a $150,000 Mortgage

Amortization is important to understand because it can affect your future financial decisions. For example, if you’re not planning on staying in your house for many years, you may find you have less equity in your home than you originally imagined by the time you’re ready to sell — because the bulk of your mortgage payments thus far have been going toward interest. It might also affect when it makes sense to refinance your mortgage.

Most lenders make it easy to make larger payments or additional payments against the principal you owe so that you can chip away at your debt total faster, but be sure to double-check that your lender doesn’t have early repayment penalties.

Of course, there are different types of home loans. Here are some sample amortization schedules for two $150,000 home loans. (You can also build your own based on your specific details with a mortgage calculator or an amortization calculator online.)

Amortization Schedule, 30-year, 7% Fixed

Notice that, for more than the first half of the loan’s lifetime, you’ll pay substantially more interest than principal each year — even though your mortgage payments remain fixed in amount.

Amortization Schedule, 15-year, 7% Fixed

While a shorter loan term may help you build equity in your home more quickly, it comes at the cost of a higher monthly payment.

How to Get a $150,000 Mortgage

To apply for a $150,000 mortgage, you can search for providers online or go into a local brick-and-mortar bank or credit union you trust. You’ll need to provide a variety of information to qualify for the loan, including your employment history, income level, credit score, debt level, and more.

The higher your credit score, lower your debt, and more robust your cash flow, the more likely you are to qualify for a $150,000 mortgage — and, ideally, one at the lowest possible interest rate. That said, mortgage interest rates are also subject to market influences and fluctuations, and sometimes rates are simply higher than others overall.


💡 Quick Tip: To see a house in person, particularly in a tight or expensive market, you may need to show the real estate agent proof that you’re preapproved for a mortgage. SoFi’s online application makes the process simple.

The Takeaway

A $150,000 mortgage can actually cost far more than $150,000. Depending on your interest rate and your loan term, you may spend more than you borrowed in principal in the first place on interest, and you’ll likely pay a higher proportional amount of interest per monthly payment for about the first half of your loan’s lifetime.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

How much is $150K mortgage a month?

A 30-year, $150,000 mortgage at a 7% fixed interest rate will be about $998 per month (not including property taxes or mortgage interest), while a 15-year mortgage at the same rate would cost about $1,348 monthly. The exact monthly payment you owe on a $150,000 mortgage will vary depending on factors like your interest rate and what other fees, like mortgage insurance, are rolled into the bill.

How much income is required for a $150,000 mortgage?

Those who earn about $55,000 or more per year may be more likely to qualify for a $150,000 mortgage than those who earn less. Although your income is an important marker for lenders, it’s far from the only one — and even people who earn a lot of money may not qualify for a mortgage if they have a high debt total or a poor credit score. (Still, the best way to learn whether or not you qualify is to ask your lender.)

How much is a downpayment on a $150,000 mortgage?

To avoid paying mortgage insurance, you’d want to put down 20% of the home’s purchase price, which if you are borrowing $150,000 would be $50,000 for a home priced at $200,000. Some lenders allow you to put down as little as 3.5% of the home’s price. So if you had a $150,000 mortgage and put down 3.5%, your down payment would be $5,440 and the home price would be $155,440. (Keep in mind these figures do not include closing costs.)

Can I afford a $150K house with $70K salary?

Yes, as long as you don’t have a lot of other debt, you can probably afford a $150,000 home if you’re making $70,000 a year. There’s a basic rule of thumb to spend less than a third of your gross income on your housing. With an income of $70,000 per year, you’re making about $5,833.33 per month before taxes — and a third of that figure is $1,925. A $150,000 mortgage might have a monthly payment of as little as $998 per month, even with a 7% interest rate, so it should be affordable for you as long as you don’t have other substantial debts.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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If you’re struggling with student loan payments or looking for a better deal on your debt, refinancing your student loans could be a smart financial decision. Unfortunately, not everyone who applies for student loan refinancing is successful.

If you’ve had your application for refinance denied, you may feel confused and disappointed. But getting a no isn’t the end of the road.

There are some common reasons why your loan may have been denied. By understanding those factors, you can take steps to correct any gaps or weak spots in your application and possibly improve your chances of refinancing in the future. Considering the advantages of refinancing for many borrowers, the effort might be worth it.

Common Reasons that Refinance Applications Are Rejected

If you’ve had your application for student loan refinance denied, the decision can feel like a mystery. The lender might not necessarily explain the reasons behind its actions, and you may be left feeling puzzled and stuck. As with a car loan rejection or mortgage modification rejection, a common thread is that the institution feels lending you money is too much of a risk. Read on to see if one of the scenarios below applies to you.


💡 Quick Tip: Some student loan refinance lenders offer no fees, saving borrowers money.

1. You Have a Low Credit Score

Lenders want to feel confident that borrowers will pay back the debt. One of the primary ways that they measure how risky you are as a borrower is by looking at your credit score. Many factors affect your credit score, including whether you’ve missed payments on credit cards or other bills, your credit history, and how much debt you’re carrying relative to your credit limits.

You can find out your current credit score through one of the three major credit bureaus: Experian, Equifax, and TransUnion. If your score isn’t up to par, that could be enough to have your loan denied.

2. You’ve Missed Payments in the Past

For some, it’s easy to let a student loan payment slip now and then. Perhaps you ran into financial difficulties and couldn’t afford to pay, or maybe you simply forgot amid the chaos of life.

Even though it’s understandable, lenders don’t look at a history of missed payments lightly. If you’ve failed to pay in the past, they may see this as a sign that you’ll skip payments with them as well. If your loan is delinquent or in default because you’ve missed too many payments, a potential lender may be even more concerned.

3. You Don’t Make Enough Money

When deciding whether they trust you as a borrower, financial institutions want to feel confident that you can afford to repay the loan. If your salary is low compared to the monthly payment you would owe, lenders might make the call that you’re at risk of not being able to pay.


💡 Quick Tip: It might be beneficial to look for a refinancing lender that offers extras. SoFi members, for instance, can qualify for rate discounts and have access to financial advisors, networking events, and more — at no extra cost.

4. Your Debt-to-Income Ratio Is Too High

Even if you earn a decent salary, a private lender could deny your application if they think your debt-to-income ratio is too high. Your debt-to-income ratio is the ratio of your outstanding debt to how much you currently make. Debt here includes anything you owe, including a mortgage, a car loan, student loans, credit card balances, or medical bills.

If those liabilities are high compared to your salary, the lender can decide that giving you a loan is too risky because you may not be able to afford it with your existing financial obligations.

5. You Don’t Have a Solid Job History

Lenders aren’t just looking at your salary. Many also want to get a sense of how solid your job is by considering things like how long you’ve been in your current role, past gaps in employment, and how often you change jobs.

If you haven’t held onto a job long or had much work experience, a lender could fear that you are at risk of losing your current gig — and your income along with it.

6. You Have Other Financial Black Marks on Your Record

A lender is looking out for any sign that you may not be a trustworthy borrower. A significant negative financial event in your history such as a lien, judgment, foreclosure, or bankruptcy can be a red flag for the institution. There may have been a good reason for it, but the lender could decide that lending to you is too precarious.

How to Improve Your Chances

1. Try Other Lenders

If you’ve been denied by just one or two lenders, it may be worth shopping around more widely. Although they follow similar principles, lenders each have their own protocols for reviewing applications.

While one might give more weight to income, another may consider education history just as important. If one lender rejected your application to refinance your student loans due to low credit scores, you may find another lender that will approve your application but at a higher interest rate, which may mean paying more in the long run.

You never know whether a lender will see you as a trustworthy borrower until you try. If you’ve been denied by multiple institutions, you may need to take some other action to improve your prospects.

2. Build Your Credit

Because your credit score is so important to lenders, including with student loan refinancing, you can work on building it if it’s on the low side. There are many ways to potentially improve your credit score. If you have missed bills in the past, you can focus on consistently making your minimum payments on every loan, bill, and credit card you have (setting up auto-pay can help you stay on top of this).

3. Raise Your Income

If your income is relatively low, earning more money may help you qualify for refinancing. This is easier said than done, but you may have more options than you think.

Can you ask for a raise or request more hours at your current job? Can you look for a higher paying role with your employer or elsewhere? Does switching fields make sense? Can you take on another job or side hustle? It’s not always possible, but increasing your earnings could make you a more appealing candidate for refinancing.

4. Give it Time

Sometimes, it can be good to wait. If you have a bankruptcy or missed payments in your past, it’ll take time for these to disappear from your credit history. (It takes seven to 10 years for a bankruptcy to be removed from your credit history.) Even if you’re making all your payments now, a lender usually wants to see that this good behavior is consistent.

Waiting until you’ve been in a new job for a couple of years can help convince lenders that your employment is solid. If these are some of the challenges you’re dealing with, time may be the best medicine. And for those struggling to make consistent payments on their student loans, it could be worth looking into income-driven repayment plans.

These are repayment plans for federal student loans that calculate monthly payments based on your discretionary income. While an income-driven repayment plan might mean you’ll pay more interest over the life of the loan, it could also lower your monthly payments, thus making your student loan debt more manageable.

5. Get a Cosigner

If none of the above tactics are working, or if you don’t want to wait to refinance, you can try reapplying with a cosigner. If this person — perhaps a parent or family friend — has solid credit and employment history, that may help you get approved for a loan or qualify for better terms.

That’s because the cosigner, by essentially guaranteeing the loan, makes you much less of a risk for the lender. But keep in mind that the cosigner’s credit score could be affected by missed payments on the loan, and they may have to make payments on the loan if you’re unable to.

Refinancing May Still Be Possible

Even if you’ve been denied in the past, that doesn’t mean you’ll never be able to refinance your student loans. Understanding the reasons that refinancing applications frequently get rejected can help you figure out where you have room to improve.

You have lots of options for strengthening your application and reducing your riskiness as a borrower, from earning more to improving your credit score to getting a cosigner. If refinancing is a student loan debt solution you feel strongly about, consider implementing these action items before reapplying.

And remember that while refinancing has lots of benefits, you’ll lose access to federal loan benefits when refinancing with a private lender. So refinancing may lower your interest rate or get you a more favorable loan term, but it will also disqualify you from taking advantage of federal programs like income-driven repayment plans.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FOREFEIT YOUR EILIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .