Can I Afford a Home at 7%? The Real Colorado Payment, Line by Line

The short answer

At 7%, a $600,000 Colorado home with 20% down costs about $3,800 a month all in (PITI: principal, interest, taxes and insurance). With 3.5% down on an FHA loan the same home is about $4,725 a month, because the loan is bigger and mortgage insurance is added. Half a point on the rate moves that payment about $155 a month. The bigger levers are the down payment, the seller, the builder and the loan type, and all four are in play in this market. Below is a real home, priced line by line, so you can see it.

PITI means principal, interest, property taxes and homeowners insurance. Taxes and insurance differ by parcel and carrier, so your number moves by a few dollars to a couple hundred a month from the example; the lender's Loan Estimate is the exact figure. To get the rate itself down, read seller concessions and 2-1 buydowns and builder rate buydowns, or get the buyer concession playbook.

What does a $600,000 home cost per month at 5.5%, 6%, 6.5%, 7% and 7.5%?

The table is principal and interest on a 30-year fixed loan. Taxes and insurance are added below it. Look across a row: the jump from 5.5% to 7.5% is real, but each half point is smaller than most buyers think.

The full payment on this home at 7%

Run your own numbers on the Kenna mortgage calculator, or call 303-955-4220 and a live person runs them with you in five minutes.

What income do you need for a $600,000 house in Colorado?

About $135,000 to $150,000 a year with 20% down, and about $165,000 with 5% down. Lenders cap total debt at roughly 43% to 45% of gross income. A $3,800 payment plus a $500 car payment and $200 in other minimums is $4,500 of debt, which needs about $10,500 a month, or $126,000 a year, before student loans. Every $100 a month of other debt costs you about $17,000 of house.

The four things that lower the payment right now

1. A seller concession or rate buydown

63% of Denver-area sales this year include a seller concession, averaging about $10,000. Used as a 2-1 buydown, that money cuts your rate 2 points in year one and 1 point in year two. On the 20% down example that is a payment near $2,590 in year one instead of $3,190. Read how to ask for a concession or buydown.

2. A builder incentive

Builders sit on a 15-year inventory peak and are paying closing costs and buying down rates on quick move-in homes. The builder rate sits well below the market rate on most quick move-in homes. See which builders are offering incentives and new construction homes for sale.

3. Down payment assistance

CHFA offers up to $25,000 in down payment help, and buyers in Adams, Arapahoe, Denver, Douglas and Jefferson counties can stack another $15,000 through NeighborhoodLIFT. Income limits apply, and a home buyer class is required. Start with the first-time buyer guide and FHA and VA buying.

4. An assumable loan

FHA and VA loans written in 2020 and 2021 carry rates in the 2s and 3s, and they transfer to the next buyer. You cover the seller's equity in cash or with a second loan. Search assumable mortgage homes for sale in Colorado and read how an assumption works.

Should I wait for rates to drop?

Waiting costs more than most buyers expect. When rates fall, buyers who stepped back step in again, and the concessions, price cuts and builder incentives that exist today shrink. Right now 57% of Denver listings carry a price cut and homes sit 53 days. That is leverage you have today. You can refinance a rate. You cannot refinance a purchase price.

Rent or buy in Colorado right now?

Renting costs less per month than buying in every large metro this year, Denver included. Buying wins when you stay five years or more, because the payment on a fixed loan does not rise and rents do. If your horizon is under three years, rent and keep saving. If it is five years or more, the numbers on this page are the ones that matter.

Homes that fit the payment

• Search every Colorado home
• Homes $400K to $600K in Denver
• Starter homes in Aurora
• Starter homes in Colorado Springs
• Homes with no HOA
• Townhomes in Denver
• Condos in Denver
• New construction in Parker
• FHA eligible homes
• VA eligible homes
• Rent to own homes

The payment is half the picture; the cash to close is the other half. Closing costs for Colorado buyers lays out every line, who pays it, and how a seller credit cuts it.

Looking for the cheapest homes? Every Colorado home under $400,000, ranked by city with the HOA and the programs that cut your cash to about $1,000: affordable homes for sale in Colorado.