What happens to my payment if interest rates fall 1%?
On a $500,000 loan, roughly each 1% change in rate moves the principal and interest payment by a few hundred dollars a month. The exact amount depends on your loan size and term, so it is worth calculating rather than estimating.
Interest Rates · Written by Anil Aggarwal, Realtor® | Mortgage Loan Officer · Updated August 8, 2026
Rate changes affect the interest portion of your payment. Taxes, insurance, HOA dues and mortgage insurance do not change with the rate.
If rates fall after you close, refinancing is the way to capture the change — subject to closing costs, qualification and the reset of the term.
No one can reliably predict rates. Treat any rate you enter as an assumption and look at several.
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Educational only: The calculators and information on this website are for educational and illustrative purposes only. Results are estimates based on the information and assumptions entered and are not a loan offer, commitment to lend, financial advice or guarantee of eligibility, rates, costs or savings. Actual loan terms, rates, fees, mortgage insurance and qualification requirements vary by borrower, property, lender and loan program. Speak with a licensed mortgage professional for personalized information.