Monthly Payments on $600K Mortgage After Fed’s December Rate Cut
Following the Federal Reserve’s recent decision, mortgage payments on a $600,000 loan have become more affordable. The Fed implemented a 25-basis-point rate cut at its December 2025 meeting, marking the third reduction in four months. This change has resulted in the federal funds rate reaching its lowest level since 2022, offering relief to homebuyers impacted by high mortgage rates.
Current Mortgage Rates
While mortgage rates aren’t directly tied to the Fed’s benchmark rate, they generally respond to the prevailing economic sentiment. Recent rate cuts in September, October, and December have contributed to a decline in mortgage rates. As of now, average mortgage rates are:
- 30-year fixed-rate mortgage: 5.99%
- 15-year fixed-rate mortgage: 5.37%
This marks a drop from the beginning of 2025, when the rates were significantly higher:
- 30-year mortgage: 7.04%
- 15-year mortgage: 6.27%
Monthly Payment Breakdown
The improved rates translate into substantial savings for borrowers. With the current rates, monthly payments for a $600,000 mortgage would be:
| Loan Type | Current Rate | Monthly Payment |
|---|---|---|
| 30-year mortgage | 5.99% | $3,593.45 |
| 15-year mortgage | 5.37% | $4,861.21 |
In comparison, payments for the same amount in January 2025 were considerably higher:
| Loan Type | Previous Rate | Previous Monthly Payment |
|---|---|---|
| 30-year mortgage | 7.04% | $4,007.95 |
| 15-year mortgage | 6.27% | $5,151.08 |
Savings Comparison
Borrowers can expect considerable savings by securing today’s lower rates:
- 30-year mortgage: Saving approximately $415 per month, totaling around $4,974 annually.
- 15-year mortgage: Saving roughly $290 each month, amounting to about $3,478 yearly.
Market Considerations for 2026
Deciding whether to secure a mortgage now or wait until 2026 requires careful thought. Experts predict one more rate cut in 2026, but this is not guaranteed. Moreover, many lenders may have already accounted for potential future rate cuts. Thus, a wait-and-see approach might not lead to significant savings.
Additionally, inventory remains tight in many housing markets. Delaying a purchase could result in increased competition and higher home prices. If buyers find a suitable property, locking in current rates could be advantageous. If rates decrease in the future, homeowners have the option to refinance for additional savings.
Conclusion
A $600,000 mortgage presents a significant financial commitment. However, current market conditions offer a more manageable payment structure than earlier in 2025. While the possibility of lower rates in 2026 exists, today’s reduced rates provide a meaningful opportunity for homebuyers. Refinancing in the future can further enhance affordability.
