Here's what a $400,000 mortgage costs at today's rates

Unless you have enough cash for a substantial down payment, you may need a mortgage of $400,000 or more to buy a home in today’s housing market.

The median sale price of an existing home is $417,500, according to the National Association of Realtors. The average sale price of a newly built house is $494,400, per the latest data from the Federal Reserve Bank of St. Louis.

These figures raise two important questions for prospective homebuyers. First, how much does a $400,000 mortgage cost each month? Second, can you realistically afford those expenses?

Read more: Home Depot sends its strongest warning yet on the housing market

How much does a $400,000 mortgage cost per month?

Keep in mind that we’re talking about the amount you borrow from a lender, not the home price. Regardless of how much the house costs, let’s assume you’re getting a $400,000 mortgage.

Homebuyers have several mortgage term options, but the 30-year fixed-rate mortgage is the most popular. For this example, I’ll use that term length to illustrate how much a $400,000 mortgage might cost.

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As of Nov. 5, the national average 30-year fixed mortgage rate was 7.18%, according to Freddie Mac data.

I plugged the numbers into the Redfin mortgage calculator. If you get a 30-year conforming mortgage for $400,000 at a 7.18% interest rate, your monthly payment toward the principal and interest will be $2,735.

However, the mortgage principal and interest aren’t the only factors that make up your monthly payment.

Don’t forget the hidden costs of homeownership

Each month you own a home, you’ll also pay for homeowners insurance, mortgage insurance, and property taxes. You should also factor in possible home repair costs and homeowners’ association dues if you live in an area with an HOA.

These are often referred to as the “hidden costs of homeownership.” They’re not exactly a secret, but many first-time buyers overlook them when calculating how much house they can afford.

When you’re deciding whether you can afford a home, you should include all of these expenses in your calculations. These expenses can significantly increase your monthly mortgage payments.

The typical American homeowner pays $1,380 per month toward home maintenance, property taxes, and insurance, according to Zillow research. Maintenance was found to be the most expensive “hidden cost” in every metro Zillow analyzed.

Add $1,380 to your $2,735 principal-and-interest payment, and the monthly payment for a $400,000 mortgage becomes $4,115.

This number gives you an idea of what to expect with a $400,000 mortgage, but it isn’t universal. The exact number will depend on your mortgage rate, property tax rate, and other personalized data.

When calculating your monthly payment on a $400,000 mortgage, consider PITI (principal, interest, taxes, and insurance), plus repair costs.

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Can you comfortably afford a $400,000 mortgage?

The next step is determining whether you can afford this payment. Don’t just ask yourself whether you can afford roughly $4,115 per month — ask yourself if you can comfortably afford it.

If your monthly housing expenses leave you with little money to save, invest for retirement, or spend on things you enjoy, you risk becoming “house poor.” This happens when too much of your income goes toward owning a home, leaving you with little financial flexibility for other priorities.

If you cannot comfortably afford the monthly payment on a $400,000 mortgage at today’s rates, consider either finding a less expensive home or looking into down payment assistance so you don’t need to borrow as much.

Related: Zillow offers to cover homebuyers’ entire FHA loan down payment

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