How much will a $500,000 mortgage cost monthly in 2026?
If you were accustomed to a series of interest rate hikes in recent years and naturally assumed that homebuying was out of the question, it may be helpful to start 2026 with an encouraging fact: Mortgage interest rates actually declined in 2025 by more than a full percentage point. After starting January 2025 with an average 30-year mortgage rate above 7%, rates declined considerably throughout the year, encouraged by a series of Federal Reserve interest rate cuts in the final months of the year. At the start of February 2026, there are now multiple ways in which borrowers can secure a rate under 6%. And savvy, qualified borrowers may even be able to find rates closer to 5% now.
This is good information to have for homeowners looking to purchase a home for $500,000 now, an average cost in many parts of the country currently. While the monthly costs associated with a loan of this type can still be more significant than they were at the start of the decade, they're also considerably lower than they were in 2023 and 2024, too. And by locking in a rate now, buyers can circumvent any changes in the rate market that may cause rates to rise before closing. So, how much will a $500,000 mortgage cost monthly in 2026 and in the months and years to follow? Below, we'll crunch the numbers.
Start by seeing how low your current mortgage rate offers are here.
How much will a $500,000 mortgage cost monthly in 2026?
With both 30-year and 15-year mortgage rates averaging under 5% now, 2026 could be one of the more affordable times in recent history to secure a mortgage of this size. Here's how much a $500,000 mortgage will cost each month and through the full life of the loan, calculated using today's average rates and the assumption that no insurance fees or taxes are added:
- 30-year mortgage at 5.99%: $2,994.54 per month
- 15-year mortgage at 5.50%: $4,085.42 per month
For context, here's what the same mortgage would have cost borrowers in February 2025, when rates were much higher (using FreddieMac data):
- 30-year mortgage at 6.89%: $3,289.66 per month
- 15-year mortgage at 6.05%: $4,232.80 per month
So, payments here are considerably improved from what they were 12 months ago. At the same time, none of the above calculations account for homeowners' insurance, taxes and private mortgage insurance (PMI) for those borrowers who make a deposit under 20%. All of those figures will also need to be added to gain a better understanding of your costs, though they can vary significantly based on your insurance company, location and initial deposit amount.
Learn more about your current mortgage options online now.
Is a 15-year mortgage worth it now?
A 5.50% mortgage interest rate isn't something to discount, particularly after the decades-high rates were sitting in recent years. At the same time, to secure it, you'll need to be willing to pay off your home in 15 years instead of the conventional 30. And it will mean larger payments thanks to the condensed timeframe. But it will also mean substantial interest savings and a debt-free finish line much earlier. So consider both terms before deciding, and be sure to ask about 20-year options, too, which can be an attractive middle ground option for borrowers who want to secure a lower rate but still want a bit more time to pay off what they owe.
The bottom line
A $500,000 mortgage in 2026 will cost between $2,995 and $4,085 monthly now and over the months and years still to come. That said, borrowers should understand that these costs don't have to be permanent, as refinancing opportunities may present themselves in the future, maybe even earlier than anticipated. Consider speaking with a lender, then, who can answer any specific questions you may have and potentially present you with a rate offer even lower than those outlined above.
