What Is the Mortgage Payment on a $350k Loan?

A mortgage payment is a regular financial obligation to repay a loan secured by real estate. This payment is typically made monthly to a lender for home acquisition. Understanding the elements that constitute this payment is important for anyone considering homeownership.

Core Components of a Mortgage Payment

A typical mortgage payment is comprised of four primary elements, often abbreviated as PITI: Principal, Interest, Property Taxes, and Homeowners Insurance. Understanding these individual parts provides clarity on how your payment is allocated.

The principal portion of your payment is the actual amount of money borrowed from the lender to purchase the home. With each payment, a portion is directed towards reducing this outstanding loan balance, known as amortization. In the initial years of a mortgage, a smaller fraction of the payment typically goes towards principal, gradually increasing over the loan term.

Interest represents the cost of borrowing the principal amount. This charge is calculated based on the outstanding loan balance and the agreed-upon interest rate. During the early stages of a mortgage, interest often constitutes the largest part of the monthly payment, slowly decreasing as the principal balance is paid down.

Property taxes are levied by local government entities and are based on the assessed value of the property. These taxes fund local services such as schools, roads, and emergency services. Lenders frequently collect an estimated amount for property taxes as part of the monthly mortgage payment, holding and disbursing these funds from an escrow account.

Homeowners insurance provides coverage for the dwelling and personal belongings against various perils, including fire, theft, and natural disasters. Lenders typically require homeowners to maintain sufficient insurance coverage to protect their investment. Like property taxes, homeowners insurance premiums are often collected by the lender as part of the monthly mortgage payment and held in escrow.

Key Factors Affecting Your Payment Amount

Several variables directly influence the size of a monthly mortgage payment, impacting the PITI components in different ways. Being aware of these influences allows for a more informed approach to home financing.

The interest rate applied to your loan is a primary determinant of the interest portion of your payment. This rate is influenced by prevailing market conditions, the specific lender, and your individual creditworthiness. Even minor fluctuations in the interest rate can result in substantial changes to the total amount paid over the life of the loan. A higher credit score, for instance, generally leads to a lower interest rate, thereby reducing the monthly payment.

The loan term plays a significant role. Common terms include 15-year and 30-year options. A shorter loan term, such as 15 years, typically results in higher monthly payments because the principal is repaid over a condensed period. However, it also means paying less total interest over the life of the loan compared to a longer term.

The amount of your down payment directly affects the principal amount borrowed. A larger down payment reduces the overall loan amount, which in turn lowers the monthly principal and interest payment. If the down payment on a conventional loan is less than 20% of the home’s purchase price, lenders typically require Private Mortgage Insurance (PMI). This additional cost, which protects the lender from default risk, is added to the monthly payment.

Property tax rates vary considerably by geographical location, impacting the tax portion of your payment. These rates are determined by local municipalities and can be subject to periodic reassessments of property values. Similarly, homeowners insurance premiums fluctuate based on factors such as the property’s location, its value, the chosen coverage limits, and the deductible amount.

Estimating a $350,000 Mortgage Payment

Estimating a mortgage payment for a $350,000 loan involves making reasonable assumptions for the various components. For a hypothetical scenario, consider a home purchase with a 10% down payment, a 30-year fixed-rate mortgage, and an average interest rate.

With a purchase price of $350,000 and a 10% down payment of $35,000, the actual loan amount would be $315,000. Using a current average 30-year fixed mortgage interest rate of 6.62% as of August 20, 2025, the monthly principal and interest payment on a $315,000 loan calculates to approximately $2,015.00. This calculation uses a standard amortization formula, distributing the repayment over 360 months.

While rates vary widely, a common effective property tax rate across the United States averages around 1.0% of the home’s value annually. For a $350,000 home, this would be $3,500 per year, equating to approximately $292 per month ($3,500 / 12).

The average annual cost for homeowners insurance in the U.S. is approximately $2,110 to $2,397 for $300,000 in dwelling coverage. For a $350,000 home, a reasonable estimate for monthly homeowners insurance could be around $180. This figure can vary based on location, coverage, and the specific insurer.

Since the hypothetical scenario involves a down payment of less than 20%, Private Mortgage Insurance (PMI) would likely be required. PMI rates typically range from 0.5% to 1.5% of the original loan amount annually. Using a mid-range estimate of 0.8% of the $315,000 loan amount, the annual PMI would be $2,520 ($315,000 0.008), resulting in a monthly cost of $210 ($2,520 / 12).

For a $350,000 loan with a $35,000 down payment, a 6.62% interest rate, and a 30-year term, the estimated payment would be: Principal & Interest ($2,015) + Property Taxes ($292) + Homeowners Insurance ($180) + PMI ($210), totaling approximately $2,697 per month. This is an estimation; actual payments vary based on precise rates, taxes, insurance, and PMI. For a personalized calculation, use online mortgage calculators.