What Each 0.25% of Mortgage Rate Really Costs
On a $400,000 30-year mortgage, every 0.25% of rate adds about $60–$70 a month and $22,000–$25,000 in lifetime interest. Going from 6% to 7% costs roughly $95,000 more over the loan — which is why shopping rates and buying points can pay off.
We computed the monthly payment and total interest at every quarter-point from 5% to 8%.
Payment and lifetime interest by rate
For a $400,000 30-year loan. The last column is the extra lifetime interest each additional 0.25% adds.
| Rate | Monthly payment | Total interest (30 yr) | Extra per 0.50% |
|---|---|---|---|
| 5.00% | $2,147 | $373,023 | — |
| 5.50% | $2,271 | $417,616 | +$44,593 |
| 6.00% | $2,398 | $463,353 | +$45,737 |
| 6.50% | $2,528 | $510,178 | +$46,825 |
| 7.00% | $2,661 | $558,036 | +$47,858 |
| 7.50% | $2,797 | $606,869 | +$48,833 |
| 8.00% | $2,935 | $656,621 | +$49,752 |
Why it matters
Each quarter-point is worth about $22,000–$25,000 over the life of the loan, so a full point (6%→7%) is roughly $95,000 and about $263 a month. That's why it pays to shop several lenders and to weigh buying discount points if you'll keep the loan. The figures scale with loan size — a $800,000 loan doubles them. Run your own numbers with the mortgage calculator.
How we calculated this
Standard fixed-rate amortization on a $400,000 30-year loan. Total interest = monthly payment × 360 − principal. The table steps by 0.50%, so each quarter-point (0.25%) is roughly half the figure shown — about $22,000–$25,000. Property tax, insurance and PMI are excluded, isolating the cost of the interest rate itself.
How much does a 1% higher mortgage rate cost?
On a $400,000 30-year loan, going from 6% to 7% adds about $263 a month and roughly $95,000 in total interest over the life of the loan.
How much does 0.25% on a mortgage cost?
About $60–$70 a month and $22,000–$25,000 in lifetime interest on a $400,000 30-year loan. The exact figure rises slightly as the base rate goes up.
Is it worth buying points to lower my rate?
Often yes, if you keep the loan past the break-even point — the upfront cost of the points divided by the monthly savings. The lifetime-interest savings from a lower rate can be large.
Does a bigger loan change these numbers?
They scale almost exactly with loan size. An $800,000 loan roughly doubles both the monthly difference and the lifetime-interest cost of each 0.25%.