What are the monthly payments on a $600,000 mortgage now, after the Fed's December rate cut?

Monthly payments connected a $600,000 owe person improved pursuing the Fed's 3rd complaint chopped of 2025. Sakchai Vongsasiripat/Getty Images

After months of shifting economical signals, from cooling (but inactive elevated) inflation to a softer jobs market, the Federal Reserve issued different 25-basis-point complaint chopped astatine the adjacent of its December gathering this week, marking its 3rd simplification successful 4 months. The determination brought the national funds complaint to its lowest level since 2022, a meaningful pivot aft years of assertive tightening. And that, successful turn, could beryllium a large alleviation for galore of the homebuyers who person been sidelined by higher-than-average owe rates. 

While owe rates don't respond straight to the Fed's benchmark rate, they bash thin to travel the broader sentiment that complaint cuts create. And, that dynamic has already begun to reshape the lodging landscape, with some the September and October Fed complaint cuts helping to push down owe rates for borrowers. While affordability remains strained successful galore markets, today's owe rates are present notably little than they were astatine the commencement of 2025, and adjacent compared to stretches of 2024, and person dropped again, albeit slightly, since the latest Fed complaint chopped was announced. 

For buyers considering a $600,000 mortgage, these complaint shifts could translate into existent monthly savings. But precisely however overmuch alleviation does the latest complaint chopped connection to homebuyers who are taking retired mortgages successful that amount? Below, we'll bash the math.

See however debased your existent owe complaint options are now.

How overmuch does a $600,000 owe outgo each period aft the December Fed complaint cut?

Today's mean owe rates beryllium astatine 5.99% for a 30-year fixed-rate owe loan and 5.37% for a 15-year fixed-rate mortgage. These rates people a important departure from the commencement of 2025, erstwhile 30-year mortgages averaged 7.04% and 15-year loans were astatine 6.27%, connected average. For a $600,000 owe loan, that complaint quality could make important breathing country successful your monthly budget. Here's what you'd wage each period astatine today's rates:

• 30-year owe astatine 5.99%: Your monthly payments would beryllium $3,593.45.
• 15-year owe astatine 5.37%: Your monthly payments would beryllium $4,861.21.

Now let's comparison those figures to what borrowers faced successful January 2025, erstwhile 30-year owe rates were averaging 7.04% and 15-year owe rates were averaging 6.27%, some of which were overmuch higher than today's rates. Back then, monthly payments connected that aforesaid $600,000 owe looked considerably steeper:

• 30-year owe astatine 7.04%: Your monthly payments would person been $4,007.95.
• 15-year owe astatine 6.27%: Your monthly payments would person been $5,151.08.

By securing today's little rates versus the rates disposable successful January, borrowers would spot savings of astir $415 per month, oregon astir $4,974 annually, connected a 30-year owe loan. Borrowers choosing 15-year mortgages successful today's complaint scenery would prevention astir $290 each month, which adds up to astir $3,478 per year.

And, today's situation offers noticeable alleviation adjacent compared to past summer's rates. In August 2024, erstwhile the 30-year owe complaint averaged 6.53% and the 15-year complaint sat astatine 5.92%, the monthly payments would person been:

• 30-year owe astatine 6.53%: Your monthly payments would person been $3,804.25.
• 15-year owe astatine 5.92%: Your monthly payments would person been $5,037.25.

That means borrowers opting for 30-year owe loans close present volition prevention astir $211 per period compared to past August, translating to astir $2,530 annually. On a 15-year mortgage, the savings travel to astir $176 monthly oregon astir $2,112 per year. 

Find the close owe indebtedness and the champion complaint for your fund here.

Should you hold for 2026 to fastener successful a owe rate?

The determination to fastener successful a owe complaint present versus waiting for the caller twelvemonth depends connected a fewer antithetic factors, but successful general, waiting for 2026 to rotation astir could beryllium a risky proposition. Right now, marketplace expectations constituent toward just 1 further complaint chopped successful 2026, though adjacent that azygous simplification isn't guaranteed. 

Many mortgage lenders person besides apt priced the anticipation of different Fed complaint chopped into today's owe rates, truthful if different chopped does hap adjacent year, it whitethorn not person a large interaction connected owe rates. That said, if ostentation continues cooling toward the Fed's target, further complaint reductions could materialize. However, if economical information shows persistent terms pressures oregon stronger-than-expected growth, the Fed mightiness clasp dependable oregon adjacent reverse course.

The lodging marketplace itself adds different furniture to this decision. Inventory remains tight successful galore competitory markets and waiting for perchance little rates means competing with different buyers who whitethorn person the aforesaid strategy. Spring besides typically brings increased competition arsenic much buyers participate the market, which could offset immoderate humble complaint improvements with higher location prices oregon bidding wars.

So, if you've recovered the close spot and tin comfortably spend today's payments, locking successful existent rates offers tangible benefits. If rates bash autumn further successful 2026, refinancing your owe indebtedness would let you to seizure those little payments down the line.

The bottommost line

A $600,000 owe represents a important fiscal commitment, but today's complaint situation makes that monthly work acold much manageable than it would person been during the archetypal fractional of 2025. Still, the determination of whether to bargain present oregon hold for 2026 is simply a valid one. Rates could determination lower, but they could besides rebound, particularly if ostentation oregon maturation diverges from expectations. Luckily, today's situation offers a meaningful model of improved affordability, and if rates driblet again adjacent year, refinancing tin assistance you seizure adjacent much savings down the line.

Edited by Matt Richardson