What are the monthly payments on a $600,000 mortgage now, after the Fed’s December rate cut?
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After months of shifting economic signals, from cooling (but still elevated) inflation to a softer jobs market, the Federal Reserve issued another 25-basis-point rate cut at the close of its December meeting this week, marking its third reduction in four months. The move brought the federal funds rate to its lowest level since 2022, a meaningful pivot after years of aggressive tightening. And that, in turn, could be a big relief for many of the homebuyers who have been sidelined by higher-than-average mortgage rates.
While mortgage rates don’t respond directly to the Fed’s benchmark rate, they do tend to follow the broader sentiment that rate cuts create. And, that dynamic has already begun to reshape the housing landscape, with both the September and October Fed rate cuts helping to push down mortgage rates for borrowers. While affordability remains strained in many markets, today’s mortgage rates are now notably lower than they were at the start of 2025, and even compared to stretches of 2024, and have dropped again, albeit slightly, since the latest Fed rate cut was announced.
For buyers considering a $600,000 mortgage, these rate shifts could translate into real monthly savings. But exactly how much relief does the latest rate cut offer to homebuyers who are taking out mortgages in that amount? Below, we’ll do the math.
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How much does a $600,000 mortgage cost each month after the December Fed rate cut?
Today’s average mortgage rates sit at 5.99% for a 30-year fixed-rate mortgage loan and 5.37% for a 15-year fixed-rate mortgage. These rates mark a significant departure from the start of 2025, when 30-year mortgages averaged 7.04% and 15-year loans were at 6.27%, on average. For a $600,000 mortgage loan, that rate difference could create substantial breathing room in your monthly budget. Here’s what you’d pay each month at today’s rates:
- 30-year mortgage at 5.99%: Your monthly payments would be $3,593.45.
- 15-year mortgage at 5.37%: Your monthly payments would be $4,861.21.
Now let’s compare those figures to what borrowers faced in January 2025, when 30-year mortgage rates were averaging 7.04% and 15-year mortgage rates were averaging 6.27%, both of which were much higher than today’s rates. Back then, monthly payments on that same $600,000 mortgage looked considerably steeper:
- 30-year mortgage at 7.04%: Your monthly payments would have been $4,007.95.
- 15-year mortgage at 6.27%: Your monthly payments would have been $5,151.08.
By securing today’s lower rates versus the rates available in January, borrowers would see savings of roughly $415 per month, or nearly $4,974 annually, on a 30-year mortgage loan. Borrowers choosing 15-year mortgages in today’s rate landscape would save about $290 each month, which adds up to approximately $3,478 per year.
And, today’s environment offers noticeable relief even compared to last summer’s rates. In August 2024, when the 30-year mortgage rate averaged 6.53% and the 15-year rate sat at 5.92%, the monthly payments would have been:
- 30-year mortgage at 6.53%: Your monthly payments would have been $3,804.25.
- 15-year mortgage at 5.92%: Your monthly payments would have been $5,037.25.
That means borrowers opting for 30-year mortgage loans right now will save approximately $211 per month compared to last August, translating to about $2,530 annually. On a 15-year mortgage, the savings come to roughly $176 monthly or around $2,112 per year.
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Should you wait for 2026 to lock in a mortgage rate?
The decision to lock in a mortgage rate now versus waiting for the new year depends on a few different factors, but in general, waiting for 2026 to roll around could be a risky proposition. Right now, market expectations point toward just one additional rate cut in 2026, though even that single reduction isn’t guaranteed.
Many mortgage lenders have also likely priced the possibility of another Fed rate cut into today’s mortgage rates, so if another cut does occur next year, it may not have a major impact on mortgage rates. That said, if inflation continues cooling toward the Fed’s target, further rate reductions could materialize. However, if economic data shows persistent price pressures or stronger-than-expected growth, the Fed might hold steady or even reverse course.
The housing market itself adds another layer to this decision. Inventory remains tight in many competitive markets and waiting for potentially lower rates means competing with other buyers who may have the same strategy. Spring also typically brings increased competition as more buyers enter the market, which could offset any modest rate improvements with higher home prices or bidding wars.
So, if you’ve found the right property and can comfortably afford today’s payments, locking in current rates offers tangible benefits. If rates do fall further in 2026, refinancing your mortgage loan would allow you to capture those lower payments down the line.
The bottom line
A $600,000 mortgage represents a substantial financial commitment, but today’s rate environment makes that monthly obligation far more manageable than it would have been during the first half of 2025. Still, the decision of whether to buy now or wait for 2026 is a valid one. Rates could move lower, but they could also rebound, especially if inflation or growth diverges from expectations. Luckily, today’s environment offers a meaningful window of improved affordability, and if rates drop again next year, refinancing can help you capture even more savings down the line.
Matt Richardson
