What Is an Average Mortgage Payment?

Principal: the portion reducing your loan balance. Interest: cost of borrowing, based on loan balance × annual rate ÷ 12. Property taxes: typically 0.5–2.2% of home value annually, escrowed monthly — managed through an escrow account.

Homeowners insurance: typically $100–$200/month. PMI: required if down payment is under 20%, typically 0.5–1.5% of loan amount annually. Combined, these make up your total monthly housing payment.

Use our guide on mortgage amortization to understand how your payments shift from primarily interest to primarily principal over time.

At a 7% 30-year fixed mortgage rate with 20% down: $300,000 home → ~$1,600/month P&I; $400,000 home → ~$2,130/month P&I; $500,000 home → ~$2,660/month P&I.

Adding taxes, insurance, and potentially PMI typically adds $400–$800/month, bringing total PITI payments to $2,000–$3,500+ for median-priced homes in most markets.

To understand what share of your income this should represent, see our guides on what percentage of income should go to housing and how much to spend on rent or housing.

Also factor in ongoing costs like the average electric bill and average water bill when budgeting total homeownership costs.

Mortgage interest rate dramatically affects monthly payment. On a $400,000 loan: at 5%, P&I = $2,147/month; at 6%, P&I = $2,398/month; at 7%, P&I = $2,661/month; at 7.5%, P&I = $2,797/month. A 1% rate difference on a $400,000 loan equals approximately $250/month or $90,000 over the life of the loan.

Rate shopping across multiple lenders is valuable. A strong credit score is one of the best tools for qualifying for lower mortgage rates. Don't forget to budget for home inspection costs and closing cost tax deductions when planning your purchase.