What changing rates mean for monthly payments To understand just how much a change in rates could impact your budget, it’s important to understand how mortgage payments work. For most borrowers ...

Then, they divide that number by 12 since you’re paying monthly. So if you owe $300,000 on your mortgage and your rate is 4%, you’ll initially owe $1,000 monthly interest ($300,000 x 0.04 ÷ 12).