First-time home buyer loan: interest rate and mortgage payment with assistance
Enter the price, the help and how it is repaid: the monthly payment with and without it, and the cash you still bring to the table.
Monthly payment with the help
$2,004
Principal and interest, 30 years at 7.4%; taxes and insurance not included.
| First mortgage | $289,500 |
| Monthly payment without help | $2,004 |
| Payment on the assistance loan | $0 |
| Cash for the down payment, without help | $10,500 |
| Cash for the down payment, with help | $500 |
| If the help went to a smaller loan instead | $1,935 |
Most programs require the minimum down payment of the first mortgage and let the help cover it and closing costs; the last line shows the payment if a program let you add the help on top of your own down payment.
Prepared by Radif Partners · Method · updated: HUD 2026 limits effective May 1, 2026 · Freddie Mac rate of October 15, 2026 · programs read on October 21, 2026
Down payment assistance changes the cash you bring far more than your monthly payment. With a deferred or forgivable second loan, the most common form, the payment on a $300,000 home with an FHA loan stays at $2,004 a month in principal and interest at 7.4%, the Freddie Mac average of October 15, 2026, while the cash needed falls by the amount of the help. Two forms do raise the payment. Some agencies fund the help through a higher rate on the first mortgage: New York's SONYMA adds 0.40 point, which brings the same loan to $2,084. Others lend the help with monthly payments: $25,000 from MassHousing at 2% over 15 years adds $161 a month. The calculator shows all three numbers side by side for your price and your help.
Five ways to pay for the same home
| Kind of help | First mortgage | Second loan | Total a month |
|---|---|---|---|
| No assistance | $2,004 | $0 | $2,004 |
| Deferred or forgivable second loan | $2,004 | $0 | $2,004 |
| Help paid through a higher rate (+0.40 point, as in New York) | $2,084 | $0 | $2,084 |
| $10,000 repaid over 10 years at 0% (Illinois Access Repayable) | $2,004 | $83 | $2,088 |
| $25,000 at 2% over 15 years (MassHousing option 2) | $2,004 | $161 | $2,165 |
The two lines that cost nothing a month, deferred and forgivable loans, are where most state help sits. They are not free: a deferred loan is repaid when you sell or refinance, and a forgivable loan is repaid in part if you leave before the end of its period. The payment is the same, the exit cost is not. The repayment page computes what you would owe at each year of sale.
When the rate is the price
A higher rate looks small, but it runs for the life of the loan. On the example above, 0.40 point adds $80 a month, about $955 a year. If you plan to refinance once rates fall, the extra cost is limited, and the help received up front may be worth more. If you plan to keep the loan for decades, compare the total with what saving the down payment yourself would take.
A loan you repay monthly
Monthly payment with the help
$1,733
| First mortgage | $241,250 |
| Monthly payment without help | $1,670 |
| Payment on the assistance loan | $63 |
| Cash for the down payment, without help | $8,750 |
Fifteen or thirty years
Almost every agency first mortgage is a 30-year fixed loan, because the agencies aim at the lowest payment. The Freddie Mac average for 15-year loans was 6.71% the same week, and a 15-year loan on $289,500 would cost $2,555 a month: affordable for few assisted buyers. Paying extra on a 30-year loan later achieves part of the same saving without the commitment.
What the lender adds
Your real payment adds property tax, homeowners insurance, mortgage insurance and any association dues. These can add several hundred dollars a month and vary widely by county. The calculator keeps to principal and interest so the effect of the help is clear; the lender's Loan Estimate gives the full figure within three business days of your application.
The interest rate a first-time buyer pays
There is no federal first-time buyer rate. The rate on a first mortgage depends on the market of the week, the loan type, the score and the down payment, and the Freddie Mac weekly average, 7.4% for 30 years on October 15, 2026, is the reference most lenders quote against. State agency loans carry their own rate sheet, set by the agency and offered through approved lenders. Assistance can move the rate in two ways: an agency can price its help into the first mortgage, as New York does with 0.40 point, or charge a rate on the second loan itself, from 0% in Illinois to 2% on the MassHousing option above. Compare quotes the same day, with and without the program, and set the rate field of the calculator to the figure each lender gives you.
Reading the result
The big figure is the payment with the help as you described it. The lines below give the first mortgage, the payment without help, the payment on the assistance loan if it has one, and the cash for the down payment with and without the help. If the cash with help reaches zero, the program pays your whole minimum and the rest of the help, where allowed, goes to closing costs. Change the repayment type to see why a monthly assistance loan, even at zero percent, weighs on the budget for years.