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Key takeaways
- A 30-year mortgage on a $1M house costs between $6,700–$8,200 per month
- Over 30 years, you may pay over $1M in interest at today’s rates
- Factors like loan duration, interest rate, and down payment heavily impact your monthly mortgage payments
Not long ago, a million dollars might have felt like a fortune. However, in today’s housing market, it’s common to find listings for homes that fall into that seven-figure range, especially in high-cost cities like Boston and San Francisco. But what does a $1M home really cost in terms of your monthly mortgage payment? Let’s break it down.
What’s included in a $1M mortgage payment?
Your mortgage payment is more than just paying back the loan. Here’s what’s typically included:
- Principal and interest: The amount borrowed plus the interest charged by your lender
- Private mortgage insurance (PMI): Needed if you put less than 20% down
- Property taxes: Set by your local government and vary based on location
- Homeowners insurance: Protects your home against damage and liability
How much you pay every month is determined by your interest rate, loan type, and down payment size. In the tables below, we’ll break down what the estimated monthly mortgage payments for a $1 million home look like based on how much money you put down upfront.
Example monthly payments for a $1M home
These estimates include the main components of a mortgage payment: principal, interest, and average additional costs like taxes and insurance. Property taxes and insurance vary by location, so actual monthly costs may differ.
30-year loan at 6.875% interest
| Down payment | Loan amount | Monthly payment (principal + interest) | Estimated total payment (including taxes + insurance) |
| 20% ($200K) | $800,000 | $5,255 | $6,697 |
| 10% ($100K) | $900,000 | $5,912 | $7,917 |
| 5% ($50K) | $950,000 | $6,241 | $8,276 |
15-year loan at 5.99% interest
| Down payment | Loan amount | Monthly payment (principal + interest) | Estimated total payment (including taxes + insurance) |
| 20% ($200K) | $800,000 | $6,747 | $8,188 |
| 10% ($100K) | $900,000 | $7,590 | $9,594 |
| 5% ($50K) | $950,000 | $8,012 | $10,047 |
Note: Many lenders require at least 20% down for jumbo loans, so the 5% and 10% scenarios may not always be available.
Want a more tailored estimate? Use Redfin’s Mortgage Calculator.
How do interest rates affect your monthly mortgage payment?
One of the biggest factors in determining your monthly mortgage payments is the interest rate. Just a small increase can add significantly to the amount you pay over the duration of your mortgage.
For a 30-year loan of $800K:
| Interest rate | Monthly payment (P&I) | Total interest paid over 30 years |
| 6% | $4,796 | $926,560 |
| 6.5% | $5,057 | $1,020,520 |
| 7% | $5,322 | $1,115,920 |
| 8% | $5,870 | $1,313,200 |
A 1% increase in interest might not seem like much on paper, but could cost you tens of thousands of dollars more in interest over the life of the loan. Improving your credit score and making a larger down payment can help you get a lower rate and reduce the total cost of buying a house.
How loan type changes monthly payments
There are multiple types of loans, and each one uniquely impacts your monthly mortgage payment and total interest paid over time. Here’s how some of the common loans compare when factoring in a 20% down payment:
| Loan type | Monthly payment (P&I) | Pros | Cons | Best for |
| 30-year fixed mortgage | $5,255 | Lower monthly payments; easier to qualify for | Higher total interest;
slower equity build |
Buyers who want to spread payments over a longer period |
| 15-year fixed mortgage | $6,747 | Pay off your home faster; less total interest | Higher monthly payments; may be harder to qualify | Buyers who can afford larger monthly payments and want to save on interest |
| Adjustable rate mortgage (ARM) | $5,255 (initially) | Lower initial payments; good for short-term buyers | Payments can increase significantly after a fixed period; unpredictable long-term costs | Buyers planning to sell or refinance before rates adjust |
How much should you put down on a $1M house?
Your down payment impacts your loan amount, monthly payment, and determines whether you need private mortgage insurance (PMI). A higher down payment means a smaller loan, lower interest costs, and, if your down payment is at least 20%, eliminates the PMI requirement.
Common down payment options
- 20% down ($200K) – No PMI, lower monthly payments, and less interest paid over time
- 10% down ($100K) – PMI required, moderate monthly payment
- 5% down ($50K) – PMI required, highest monthly payment, and most interest paid
Some government-backed loans (FHA, VA, USDA) allow as little as 0–3.5% down, but they rarely apply to $1M homes since loan limits are lower.
Income needed for a $1M home (30-year loan at 6.875% interest)
Before you decide on a home, it’s important to understand just how much house you can afford based on your expenses and income. Lenders often suggest following the 28/36 rule to get an idea of what’s within reach. According to this rule, your monthly housing costs shouldn’t exceed 28% of your gross income, while total debt payments (such as loans and credit cards) should remain under 36%.
Below is a breakdown of the income typically needed to afford a million-dollar home based on the 28/36 rule.
| Gross monthly income | Affordable mortgage payment | Can afford a $1M home? |
| $8,000 ($72K/year) | ~$2,240 | No |
| $16,000 ($192K/year) | ~$4,480 | No |
| $24,000 ($288K/year) | ~$6,720 | Yes |
Final thoughts on buying a $1M home
Buying a million-dollar home comes with significant monthly costs, especially in today’s interest rate environment. Your loan type, down payment, and interest rate will be the biggest factors in determining affordability.
- Aim for a 20% down payment if possible to avoid PMI and secure better rates
- Shop around for lenders offering competitive jumbo loan rates
- Factor in property taxes, insurance, and closing costs when budgeting
Using Redfin’s Mortgage Calculator can give you a more personalized estimate before you make a move.
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