Choosing a term on a $200,000 loan
Shortening the loan costs less here than on bigger balances. The 15-year payment of $1,765.39 is only $380.63 above the 30-year, and it wipes out $180,744 of interest. A 20-year loan sits between them at about $1,515.98 (assuming the 30-year rate). Many borrowers take the 30-year for flexibility and prepay. Adding $100 a month ends the loan in 24 years 1 months and saves $69,619.
Where $200,000 buys a whole house
With 20% down this loan supports a $250,000 purchase, which is at or above the median home value in 11 states: Alabama, Arkansas, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Ohio, Oklahoma, West Virginia. In those states the property tax rate usually decides affordability, so open the state page to see the local escrow.
USDA and FHA at this size
Rural buyers can use a USDA Guaranteed loan with no down payment. Its 1% upfront fee is usually financed, making the balance about $202,000 and the principal and interest roughly $1,398.61 at today's rate, plus a small annual fee. An FHA buyer putting 3.5% down borrows $200,000 on a home of about $207,000, and pays upfront and annual mortgage insurance premiums on top.
Payment by rate and term
| Rate | 15-year | 20-year | 30-year | 30-year total interest |
|---|---|---|---|---|
| 5.5% | $1,634.17 | $1,375.77 | $1,135.58 | $208,808 |
| 6% | $1,687.71 | $1,432.86 | $1,199.10 | $231,676 |
| 6.5% | $1,742.21 | $1,491.15 | $1,264.14 | $255,089 |
| 7% | $1,797.66 | $1,550.60 | $1,330.60 | $279,018 |
| 7.4% | $1,842.68 | $1,598.98 | $1,384.76 | $298,513 |
| 7.5% | $1,854.02 | $1,611.19 | $1,398.43 | $303,434 |
| 8% | $1,911.30 | $1,672.88 | $1,467.53 | $328,310 |
Equity built on $200,000 in the first 10 years
After five years of $1,384.76 payments the balance is about $189,046, so only $10,954 of the $83,086 paid went to principal. By year ten you owe $173,205 and have paid $139,377 in interest. On the 15-year loan, ten years of payments retire $110,225 instead.
FHA vs. conventional on a $250,000 home
At this size the down payment is often the real hurdle, not the monthly bill. FHA's 3.5% minimum is $8,750, against $50,000 for 20% down, and FHA accepts lower credit scores than most conventional programs. Many state housing agencies pair FHA or conventional first mortgages with down payment assistance aimed at exactly this price range, so check your state page before choosing. Assumptions: FHA carries a financed 1.75% upfront premium and 0.55% a year; conventional PMI is 0.5% a year.
| Option | Down payment | Loan amount | Monthly payment incl. tax, insurance and MI | Income needed (28%) | Cash for down payment |
|---|---|---|---|---|---|
| Conventional, 20% down | $50,000 | $200,000 | $1,715.02 | $73,501 | $50,000 plus closing costs |
| Conventional, 5% down with PMI | $12,500 | $237,500 | $2,073.62 | $88,870 | $12,500 plus closing costs |
| FHA, 3.5% down | $8,750 | $245,472 | $2,140.43 | $91,733 | $8,750 plus closing costs |
Property taxes on a $250,000 home
Tax on a $250,000 house runs about $2,226 a year at the 0.89% U.S. effective rate. Hawaii would bill roughly $675 and Illinois about $4,800, so the same loan costs $343.75 more each month in the highest-tax state.
| State | Effective rate | Yearly tax | Monthly |
|---|---|---|---|
| Illinois | 1.92% | $4,800 | $400.00 |
| New Jersey | 1.89% | $4,725 | $393.75 |
| Connecticut | 1.66% | $4,150 | $345.83 |
| New Hampshire | 1.46% | $3,650 | $304.17 |
| New York | 1.45% | $3,625 | $302.08 |
Income needed for $200,000 at 28% and 36%
With no other debts, the 28% housing rule is the one that binds: about $73,501 a year covers the $1,715.02 payment. Each $300 of car or student-loan payments pushes the 36% figure up by about $10,000 of income. Many first-time buyers at this loan size have exactly those debts, so pay off a small balance before applying if you can.
| Other monthly debts | Income needed (28% housing rule) | Income needed (36% total-debt rule) | Income that satisfies both |
|---|---|---|---|
| $0 | $73,501 | $57,167 | $73,501 |
| $300 | $73,501 | $67,167 | $73,501 |
| $600 | $73,501 | $77,167 | $77,167 |
| $1,000 | $73,501 | $90,501 | $90,501 |
By state
| State | With tax & insurance | Share of median income |
|---|---|---|
| Alabama | $1,622.76 | 29.21% |
| North Carolina | $1,666.18 | 27.03% |
| California | $1,670.59 | 20.02% |
| Ohio | $1,731.93 | 28.78% |
| Florida | $1,772.59 | 27.36% |
| New York | $1,836.93 | 25.69% |
| Texas | $1,896.34 | 28.54% |
| Illinois | $1,908.09 | 27.52% |
FAQ
What is the monthly payment on a $200,000 mortgage?
At 7.40% for 30 years, principal and interest is $1,384.76 a month. At 6.71% for 15 years it is $1,765.39. Taxes, insurance and any PMI are extra.
Is $200,000 a good refinance size?
Closing costs are mostly fixed, so on smaller balances a rate cut takes longer to pay back. Divide the closing costs by the monthly saving: a 1-point drop saves about $133.75 a month here.
Other amounts: $250,000 · $300,000 · $350,000 · $400,000 · $500,000
Rates: Freddie Mac PMMS, week of October 15, 2026. Taxes, income: Census ACS 2024. Insurance: NAIC 2023.