The Fed’s latest interest rate cut in October 2025 has sent ripples through the housing market, and prospective homebuyers and homeowners alike are wondering: what is the monthly cost of a mortgage now?
While the Fed doesn’t directly set mortgage rates, its policy moves significantly influence borrowing costs for home parcels and refinancing alike.
Recent reporting from CBS News illustrates how this shift has translated into appreciable savings in monthly payments on large loans.
For example, on a $600,000 mortgage, borrowers can now expect lower monthly principal and interest costs compared with rates earlier this year.
Monthly payment overview and how much you’re saving
To put things in perspective: for a $600,000 mortgage, with a 30-year fixed loan currently averaging a rate of about 6.13%, you’d pay approximately $3,647.60 monthly in principal and interest.
By contrast, at the start of 2025 when the average rate was around 7.04%, a comparable loan would have cost about $4,007.95 per month, that’s roughly $360 less per month, or over $4,300 in savings annually under today’s rate.
For a larger loan size, say $800,000, the savings are still meaningful. Under the latest rate environment, payments on an $800,000 mortgage are down by a few hundred dollars per month compared with both January 2025 and late 2024.
More specifically, back in October 2024 a 30-year fixed rate at 6.72% would have cost about $5,172.84 per month on an $800,000 loan; now borrowers would pay approximately $263 less monthly on that same amount.
These numbers illustrate a broader trend: while mortgage costs remain elevated compared with the historically low rates of earlier years, the recent Fed cut has nonetheless produced measurable relief in monthly home-ownership costs.
Additional considerations for buyers and owners
It’s important to remember that typically these monthly payment figures only cover principal and interest, they do not include property taxes, homeowners’ insurance, private mortgage insurance (if applicable), or other fees.
Also worth noting: while the Fed‘s rate cut provides downward pressure, mortgage rates are influenced by many other factors (such as the 10-year Treasury yield, lender margins, credit conditions and home-price trends), so rates could still move in either direction.
For homeowners currently locked into higher rates (for example 7% or above) this moment may also present an opportunity to refinance. But refinancing has its own costs, closing fees, possible reset of loan term, and your break-even timeline all matter.
For potential homebuyers, these figures highlight how timing (in terms of rate environment) and loan size both substantially affect monthly obligations.
Even a modest rate reduction translates into hundreds of dollars saved per month, which can impact affordability, budgeting, and long-term financial planning.
Thanks to the Fed‘s October 2025 rate cut, current mortgage rates are lower than they were earlier this year, and borrowers are seeing savings in monthly payments.
For a $600,000 loan the drop is in the high hundreds per month versus the beginning of 2025; for an $800,000 loan, the savings are likewise significant.
Of course, these costs only reflect principal and interest; full home-ownership costs will be higher. Still, this represents a meaningful improvement in affordability for many.
If you’re shopping for a home now or thinking about refinancing, this may be an opportune window. Just be sure to factor in all the associated costs, loan term, and how long you plan to stay.