The Fed’s rate cuts have improved mortgage affordability, but the costs remain substantial for high-value loans.
After months of elevated borrowing costs, mortgage shoppers finally saw rates ease this fall following the Federal Reserve’s back-to-back rate cuts, which lowered the benchmark rate by 50 basis points in total. The Fed rate cuts, which slashed the benchmark rate by 25 basis points in September and then another 25 basis points in October, prompted mortgage lenders to lower their rates, resulting in the average 30-year mortgage loan rate dipping into the low-6% range, reversing much of the rate pressure that had built earlier in the year.
Still, affordability remains strained for many homebuyers, especially those taking out large mortgage loans, which often come with higher credit standards and larger, long-term financial commitments. And that pressure shows up quickly with a mortgage loan as large as $900,000. At that amount, even minor rate movements can generate hundreds of dollars in added monthly payments, making timing especially important for borrowers in this cooling-but-still-high-cost environment. After all, the actual monthly payment on your mortgage depends heavily on the mortgage rate you lock in.
So what does a $900,000 mortgage cost each month at today’s rates, and how do those figures stack up to recent averages? That’s what we’ll break down below.
Learn how affordable your mortgage loan could be at today’s rates.What are the monthly payments on a $900,000 mortgage after the recent Fed rate cut?
Right now, the 30-year mortgage rate sits at 6.12%, down from over 7% at the start of the year. Meanwhile, 15-year mortgage rates are sitting at an average of 5.37% currently, compared to over 6.2% at the start of the year. Here’s what the monthly payments on a $900,000 mortgage loan would be at today’s average rates:
30-year mortgage loan at 6.12%: At this rate, your monthly mortgage payment would be $5,465.59.
15-year mortgage loan at 5.
