Mortgage Payment Calculator
Calculate your monthly mortgage payment including principal, interest, property tax, insurance, and PMI. View a full amortization schedule.
A mortgage calculator is a free tool that estimates your monthly home loan payment by combining your loan amount, interest rate, and loan term with property taxes, homeowner's insurance, and PMI. The standard formula used is:
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PITI · Rate Impact · Tax Math · Refinancing · ARM · 5 more
Run a 10-layer deep dive on every aspect of your mortgage payment: PITI breakdown (how each dollar splits across principal, interest, taxes, insurance), rate impact analysis showing how a 1% rate change moves $95K over 30 years, amortization curve dynamics, 15 vs 30-year math with the honest invest-the-difference comparison, PMI mathematics by down payment and credit tier, 2026 tax implications including the standard-deduction wall, extra payment strategy with year-by-year impact tables, refinancing economics with break-even calculation, fixed vs ARM risk-adjusted comparison, and a complete closing cost line-item breakdown.
PITI Anatomy: The Four Parts of Your Payment
Your "monthly mortgage payment" is actually four separate things bundled into one number. Understanding each part is the difference between knowing what you pay and knowing where every dollar goes.
Most homeowners think of their mortgage as a single payment. In reality, what your lender draws from your account each month is a composite called PITI — Principal, Interest, Taxes, and Insurance. On a typical mortgage, the breakdown looks roughly like this:
The first two — principal and interest — are what your loan amortization schedule covers. Principal is the chunk that reduces what you owe. Interest is what the lender charges you for the privilege of borrowing. Early in a 30-year mortgage, the ratio is heavily skewed toward interest: in year 1, roughly 80% of every payment is interest and only 20% is principal. By year 23, that flips — most of each payment is now principal.
The other two parts — taxes and insurance — aren't really "mortgage" costs in the strict sense. Property taxes go to your local government to fund schools, roads, and services. Homeowners insurance protects the asset (and protects the lender's collateral). When these are included in your monthly payment, your lender is collecting them in advance and paying them on your behalf via an escrow account.
Why this matters for budgeting: Two homes with identical sale prices can have wildly different total monthly costs depending on the local property tax rate. A $400,000 home in Texas (1.6% effective property tax) costs about $533/month in property tax alone. The same home in Hawaii (0.27% effective rate) costs $90/month. That's $5,300 per year of differential — enough to materially change your affordability calculation.
Why this matters for refinancing: When you compare offers, the rate on the loan only affects principal and interest. Property tax and insurance are unchanged regardless of where you finance. So a "lower payment" via refinancing isn't a 100% reduction across all four PITI components — only on the P+I half.
How a 1% Rate Change Moves $95,000
Mortgage rates feel abstract until you see what a single percentage point does to your wallet over 30 years. The numbers are larger than most people realize.
The compounding nature of long-term debt makes small rate differences enormous over time. On a $400,000 30-year mortgage, here's what each rate looks like:
| Rate | Monthly P&I | Total Interest | vs 6% |
|---|---|---|---|
| 5.0% | $2,147 | $372,894 | −$87,000 |
| 5.5% | $2,271 | $417,704 | −$42,000 |
| 6.0% | $2,398 | $463,353 | baseline |
| 6.5% | $2,528 | $510,182 | +$47,000 |
| 7.0% | $2,661 | $558,030 | +$95,000 |
| 7.5% | $2,797 | $606,790 | +$143,000 |
The difference between 6% and 7% — just one percentage point — is $263 per month and $95,000 over the life of the loan. That's nearly a quarter of the original loan amount.
This is why shopping multiple lenders is one of the highest-leverage activities in home buying. Three lenders will typically quote rates within a 0.25-0.50% range for the same borrower. That's roughly $24,000-$48,000 in savings over 30 years for the work of three phone calls or online applications.
The rate-buying trade-off: You can buy down your rate with discount points. Each point costs 1% of the loan amount and typically reduces the rate by 0.25%. On a $400K loan, paying $4,000 upfront to drop the rate from 6.5% to 6.25% saves about $63/month, breaking even in 64 months. Worth it if you'll stay in the home longer than that; not worth it if you'll move or refinance sooner.
The rate-lock window: Rate locks typically last 30-60 days from application. If you're shopping homes, a 60-day lock with float-down (lets you re-lock at a lower rate if rates drop) is worth the small extra fee. Without one, you're exposed to potentially significant rate moves between offer acceptance and closing.
Your Amortization Schedule: Why Year 1 vs Year 25 Look Different
Every mortgage payment is the same dollar amount. But how that dollar gets split between principal and interest changes radically over the life of the loan.
Mortgage amortization is the schedule by which your fixed monthly payment gradually shifts from being mostly interest to mostly principal. Here's what that looks like on a $400,000 mortgage at 6.30% over 30 years:
| Year | Annual Payment | To Principal | To Interest | Balance Remaining |
|---|---|---|---|---|
| 1 | $29,716 | $5,116 (17%) | $24,600 (83%) | $394,884 |
| 5 | $29,716 | $6,569 (22%) | $23,147 (78%) | $371,615 |
| 10 | $29,716 | $8,963 (30%) | $20,753 (70%) | $330,575 |
| 15 | $29,716 | $12,231 (41%) | $17,485 (59%) | $274,581 |
| 20 | $29,716 | $16,690 (56%) | $13,026 (44%) | $198,168 |
| 25 | $29,716 | $22,777 (77%) | $6,939 (23%) | $93,914 |
| 30 | $29,716 | $28,837 (97%) | $879 (3%) | $0 |
This is the amortization curve at work. Because interest is charged on the remaining balance, and the balance is highest in year 1, almost every dollar in those early payments goes to interest. As the balance shrinks, less interest accrues each month, freeing up more of the fixed payment to attack principal.
The implication for selling early: If you sell after 5 years, you've paid $148,580 in mortgage payments but only built $28,385 in equity from principal payoff (plus any home appreciation). That's why short-hold transactions on 30-year mortgages are inefficient — you're heavily renting at the beginning. The break-even period to recoup transaction costs (5-6% of home value to sell) is typically 5-7 years on a stable market.
The implication for extra payments: Because of this front-loaded interest, an extra $200 in monthly principal during year 1 is worth far more than the same payment in year 20. That single $200 in year 1 essentially buys you ~$700 of debt elimination over the life of the loan due to the compounding interest you avoid. Front-loading extra payments yields the biggest absolute savings.
15-Year vs 30-Year: Real Cost Comparison
The 15-year mortgage saves enormous lifetime interest. The 30-year mortgage saves enormous monthly cash flow. Which is right depends on what else you would do with that monthly difference.
On a $400,000 mortgage, the trade-off between 15-year and 30-year is stark:
Total paid: $891,720
Total paid: $594,540
The 15-year saves $297,180 in lifetime interest — but requires an additional $826/month in cash outflow.
The honest version of the math: If you take the 30-year and invest the $826/month difference at a 7% expected return for 15 years, you end up with about $258,000 — short of the $297,180 interest savings, but in the same neighborhood. Plus you have liquid investments rather than home equity, plus you've kept the optionality of paying down the loan faster if your situation changes.
15-year wins when: Your stable income comfortably covers the higher payment, you're closer to retirement and want to be debt-free before then, you don't have meaningful retirement savings yet (so the "invest the difference" alternative isn't available), or you have a temperament that struggles with discipline on long-horizon investing.
30-year wins when: Your income is variable, you want maximum cash-flow flexibility for emergencies or other goals, you want to maximize tax-advantaged retirement contributions (401(k), IRA, HSA), you're young enough that 15+ years of compounding can outpace the interest savings, or you have higher-rate debt (credit cards, etc.) that should get paid first.
The hybrid approach: Take the 30-year for flexibility, but commit to making 26 payments per year via biweekly scheduling. This makes one extra full payment per year and effectively reduces your 30-year mortgage to roughly 23 years — capturing about half the lifetime interest savings of the 15-year while keeping the lower required monthly payment.
PMI Mathematics: The Real Cost of Buying With Less Than 20% Down
Private mortgage insurance feels like a tax for being a normal person. The math is more nuanced — sometimes it makes sense, sometimes it costs more than people realize.
Private mortgage insurance (PMI) is required on conventional loans when your down payment is less than 20%. The lender is exposed to higher risk on a high-LTV loan, and PMI is the insurance policy that protects them (not you) if you default.
PMI typically costs 0.46% to 1.50% of the loan amount annually, divided into 12 monthly payments. Your specific rate depends on credit score, down payment percentage, and loan-to-value ratio:
| Down Payment | LTV | Typical PMI rate | Monthly PMI on $360K loan |
|---|---|---|---|
| 3% | 97% | 1.10% | $330/month |
| 5% | 95% | 0.90% | $270/month |
| 10% | 90% | 0.62% | $186/month |
| 15% | 85% | 0.46% | $138/month |
| 20%+ | ≤80% | 0% (no PMI) | $0 |
When PMI auto-removes: On conventional loans, lenders are required by federal law (Homeowners Protection Act of 1998) to automatically terminate PMI when your loan balance reaches 78% of the original home value. You can request earlier removal at 80% LTV with good payment history. On a 30-year mortgage starting at 95% LTV, automatic removal typically happens around year 11 from amortization alone — or sooner if home values rise.
FHA mortgage insurance is different: FHA loans have MIP (Mortgage Insurance Premium) instead of PMI. Critically, on most FHA loans MIP lasts for the life of the loan — you can't remove it by reaching 80% LTV. The only way out is to refinance to a conventional loan once you have 20% equity. This is the single biggest reason FHA loans can be more expensive than they appear.
The "PMI vs save longer" calculation: If you have 10% saved and could buy now (with PMI) or wait 18 months to save the additional 10%, run the numbers:
- Buy now: Pay $186/month PMI for ~7 years until reaching 80% LTV = roughly $15,600 in PMI
- Wait 18 months: Miss potentially $30K-$50K of home appreciation and 18 months of mortgage interest deduction; pay 18 more months of rent
In rising-price markets, buying with PMI almost always wins. In flat or falling markets, waiting can be the better call. PMI is rarely the deal-breaker most people fear.
Tax Implications of Your Mortgage in 2026
The 'mortgage interest deduction' is one of the most misunderstood tax benefits. Here's who actually gets it, who doesn't, and what it's worth.
The mortgage interest deduction allows itemizing taxpayers to deduct interest paid on mortgage debt up to $750,000 of acquisition indebtedness ($375,000 if married filing separately). For most homeowners post-2017, this deduction is unused because the standard deduction is now too high to beat.
The standard deduction wall: For 2026, the standard deduction is $30,000 (married filing jointly) and $15,000 (single). To benefit from itemizing, your total itemized deductions — mortgage interest + state/local tax (capped at $10,000) + charitable giving + medical expenses above 7.5% of AGI — must exceed these standard amounts.
The break-even mortgage: A typical married couple in a moderate-tax state needs roughly $400K-$500K in mortgage balance at 6%+ rates before itemizing beats the standard deduction. Below that, the mortgage interest deduction is effectively zero benefit.
Here's what that looks like in practice. Married couple, $200,000 income, $400,000 mortgage at 6.30%:
| Itemized Deduction | Amount |
|---|---|
| Mortgage interest (year 1) | $24,948 |
| State income tax (capped) | $10,000 |
| Charitable giving | $3,000 |
| Total itemized | $37,948 |
| Standard deduction | $30,000 |
| Net benefit from itemizing | $7,948 |
| Tax savings @ 24% marginal rate | $1,907 |
That's $1,907 in actual tax savings — meaningful but a far cry from "deduct all my mortgage interest." Many homeowners hear "you can deduct mortgage interest" and assume their full annual interest payment becomes a tax credit. It doesn't.
Property taxes: Deductible as part of the SALT (State and Local Tax) cap, which is $10,000 total combining state income tax + property tax. In high-tax states like California, New York, and New Jersey, the SALT cap routinely costs homeowners $5,000-$15,000 in lost deductions per year compared to pre-2017 rules.
Mortgage points: Discount points paid at origination are deductible in the year paid (purchase) or amortized over the loan term (refinance). Typically only beneficial when itemizing.
Capital gains exclusion at sale: Single filers can exclude up to $250,000 of home sale gains; married filers up to $500,000. Must have lived in the home as primary residence for 2 of the prior 5 years. This is one of the most powerful tax benefits in the entire code — far more impactful than the mortgage interest deduction for most homeowners.
Extra Payment Strategy: Where Each Dollar Has the Biggest Impact
Extra principal payments dramatically reduce both timeline and total interest. The math gets surprising when you compare one-time vs ongoing strategies.
On a $400,000 30-year mortgage at 6.30%, the standard payment is $2,477/month. Here's what different extra-payment strategies do to that loan:
| Strategy | Total Time | Interest Saved | Years Saved |
|---|---|---|---|
| Baseline (no extra) | 30 years | $0 | 0 |
| +$100/month | 26.7 years | $58,470 | 3.3 |
| +$200/month | 24.1 years | $103,720 | 5.9 |
| +$500/month | 19.0 years | $198,470 | 11.0 |
| Biweekly payments (26/yr) | 23.7 years | $112,840 | 6.3 |
| One-time +$10K (year 1) | 28.1 years | $54,920 | 1.9 |
| One-time +$10K (year 15) | 29.4 years | $8,640 | 0.6 |
The difference between making a $10,000 extra payment in year 1 vs year 15 is striking — 6.4x more impact early. That's the front-loaded interest math at work. Every dollar of principal you pay early prevents many years of compound interest from accruing on that dollar.
Biweekly payments are surprisingly powerful for being passive. By paying half your monthly payment every two weeks (instead of full monthly), you make 26 half-payments per year = 13 full payments. That extra payment annually shaves about 6 years off a 30-year mortgage with no other changes to your budget. Many lenders offer this automated.
The "extra payments vs invest" decision: Extra mortgage payments produce a guaranteed return equal to your mortgage rate. At a 6.30% rate, paying down extra principal earns 6.30% guaranteed. Compare to:
- S&P 500 historical average: ~10% annual nominal return, but with significant volatility and not guaranteed
- High-yield savings: ~4.5% currently, fully liquid
- 401(k) with employer match: Effectively 50-100% immediate return on the matched portion
- Credit card debt: 21%+ APR — eliminating this beats every other guaranteed return
The hierarchy: pay off any debt above your mortgage rate first (credit cards), capture full 401(k) match, then the extra-payments-vs-investing calculation depends on your mortgage rate, risk tolerance, and time horizon.
Refinancing Economics: When the Math Actually Works
Refinancing has a break-even period, transaction costs, and a marginal benefit that's easy to overestimate. Here's how to know if it's worth doing.
Refinancing replaces your existing mortgage with a new one, typically to capture a lower interest rate, change the loan term, or convert from one loan type to another. The economics depend on three numbers:
- Closing costs: Typically 2-5% of the loan amount, or roughly $4,000-$15,000 on a $300K-$500K refinance
- Monthly savings: The difference in your new monthly payment vs your existing one
- Break-even period: Closing costs ÷ monthly savings = months to recoup the upfront investment
A typical example: existing $400K loan at 7.0% with $2,661/month P&I, refinanced to 6.0% with $2,398/month P&I. Monthly savings: $263. Closing costs: $8,000. Break-even: 30 months. If you'll stay in the home longer than 30 months (2.5 years), the refinance pays off.
The traditional rule of thumb is to refinance when current rates are at least 1 percentage point below your existing rate, with the loan amount large enough that the savings are meaningful in dollar terms. For loans under $200K, the math gets harder because closing costs eat into the savings.
The cash-out refinance trap: Cash-out refinances let you take out home equity as cash by increasing your loan amount. Tempting in low-rate environments, but they essentially convert short-term debt into 30-year debt — extending interest payments on the cashed-out amount across the entire loan period. Doing this to fund a remodel, college tuition, or paying off credit cards can make the math much worse than the headline rate suggests.
The "extending the term" pitfall: If you've been paying your existing mortgage for 8 years and refinance into a new 30-year mortgage, you've effectively reset the clock. Even at a lower rate, you may end up paying more total interest because you're now paying interest for 38 years instead of the original 30. Run the numbers carefully — many "savings" calculations only show monthly payment without the term extension cost.
No-closing-cost refinance: Lenders offer "zero closing costs" by raising your interest rate. The closing costs are still there — they're just absorbed into a higher rate over the life of the loan. Often more expensive than paying the closing costs upfront if you stay in the home long-term, but useful if you're not sure you'll stay long enough to recoup upfront costs.
Rate-and-term refinance: The most common type. Lower rate, possibly different term, no cash out. Cleanest economics — straightforward break-even calculation works.
Fixed-Rate vs ARM: The Risk-Adjusted Comparison
Adjustable-rate mortgages start cheaper but expose you to rate risk later. The right choice depends on your time horizon and risk tolerance.
An adjustable-rate mortgage (ARM) has an initial fixed period — typically 5, 7, or 10 years — followed by an adjustment period where the rate floats based on a market index (typically SOFR or the 1-year Treasury) plus a margin. ARMs are quoted as "5/1," "7/1," or "10/1" — first number is the fixed period, second is the adjustment frequency.
In early 2026, ARMs typically offer 0.50-1.00% lower initial rates than 30-year fixed. On a $400K loan, that's $130-$260/month in savings during the fixed period.
| Loan Type | Initial Rate | Monthly P&I | 5-Year Total P&I |
|---|---|---|---|
| 30-year fixed | 6.30% | $2,477 | $148,620 |
| 5/1 ARM | 5.55% | $2,283 | $136,980 |
| 7/1 ARM | 5.80% | $2,348 | $140,880 |
| 10/1 ARM | 5.95% | $2,387 | $143,220 |
Over the 5-year fixed period of a 5/1 ARM, you save $11,640 vs the 30-year fixed. That savings disappears quickly if rates rise sharply when the ARM adjusts.
ARMs make sense when:
- You're confident you'll move before the fixed period ends (military relocation, planned career change, starter home)
- You're confident you'll refinance before the adjustment (works only if rates trend down)
- You have substantial financial resilience to absorb a higher payment if rates rise
- Current rates are unusually high relative to historical norms (suggesting they'll fall)
ARMs DON'T make sense when:
- The home is your "forever" home or you have a 10+ year horizon
- Your income is stable but tight (no buffer for higher payments)
- You're psychologically uncomfortable with payment uncertainty
- Current rates are already near historic lows (suggesting they'll rise)
Rate caps: All ARMs have caps that limit how much the rate can change. A typical "5/2/5" cap structure means: 5% maximum increase at first adjustment, 2% maximum at any subsequent adjustment, 5% maximum lifetime increase above initial rate. So a 5/1 ARM starting at 5.55% has a maximum lifetime rate of 10.55%. Worth noting: that's a worst-case payment of $3,663/month vs the $2,283 starting payment — a $1,380/month difference if rates spike.
The 2008 lesson: Many homeowners who took ARMs in 2005-2007 found they couldn't refinance when rates rose because their home values had dropped. They were stuck with rate adjustments and rising payments. Today's rate caps prevent the most extreme scenarios, but the underlying risk remains: ARMs require optionality (ability to refinance or sell) that may not exist when you need it most.
Closing Costs: The Itemized Real Cost
Closing costs add 2-5% to your home purchase. Here's the line-item breakdown of what you're actually paying for.
Closing costs are the fees and charges paid at the closing of a real estate transaction, on top of the down payment. They typically run 2-5% of the home price for buyers, or roughly $8,000-$25,000 on a typical home.
On a $400,000 home with 20% down, here's what a typical buyer-side closing cost breakdown looks like:
| Category | Cost Item | Typical Amount |
|---|---|---|
| Lender Fees | Loan origination fee | $1,200-$3,200 |
| Underwriting fee | $400-$800 | |
| Application fee | $200-$500 | |
| Third-Party Fees | Appraisal | $500-$800 |
| Home inspection | $400-$700 | |
| Credit report | $30-$80 | |
| Title & Recording | Title insurance (lender) | $1,000-$2,000 |
| Title insurance (owner, optional) | $1,500-$3,500 | |
| Recording fees | $100-$300 | |
| Government & Taxes | Transfer tax (varies wildly) | $0-$8,000 |
| Property tax escrow (initial) | $1,000-$3,000 | |
| Homeowners insurance (1 year prepaid) | $1,500-$3,000 | |
| Other | Daily interest (closing date to month-end) | $200-$1,000 |
| HOA fees (if applicable) | $0-$500 | |
| Total | ~$8,000-$25,000 | |
What's negotiable: Lender fees (origination, application, underwriting) are the most negotiable — different lenders charge wildly different amounts. Title insurance for the owner's policy is also negotiable in some states (lender's title insurance is required by the lender). Inspection cost is fixed by the inspector but you choose who.
What's not negotiable: Government recording fees, transfer taxes, daily interest, and prepaid escrow. These are external costs the lender passes through.
Seller-paid closing costs: In a buyer's market, sellers will often agree to cover some portion of buyer closing costs as part of the negotiation — typically 1-3% of the purchase price. This shows up as a "seller concession" in the contract. The advantage to the buyer is reducing cash needed at closing; the disadvantage is the home price typically needs to be slightly higher to offset.
The "no closing cost" loan: Some lenders offer to roll closing costs into the loan amount or absorb them in exchange for a slightly higher interest rate (typically 0.25-0.5% higher). On a $400K loan, that's $50-$100/month extra forever, vs $8,000 saved at closing. Break-even is typically 7-13 years — usually not worth it if you'll stay in the home long term.
Loan Estimate accuracy: Federal law (TRID) requires lenders to provide a Loan Estimate within 3 days of application. Most categories of fees can't increase at closing without re-disclosure. The exceptions: prepaid items (interest, taxes, insurance) and any fees you didn't shop for. Always compare the final Closing Disclosure (provided 3 days before closing) to the original Loan Estimate.
Mortgage Decision Support System
Showing baseline scenarios — enter your details above to personalize
How Much Will Your Mortgage Payment Be?
DIRECT ANSWERThe short answer: At today's average 6.30% 30-year rate (Freddie Mac, week of April 16, 2026), a $320,000 loan (20% down on a $400,000 home) costs about $1,980/month in principal and interest. Add property tax, homeowners insurance, and PMI if you put less than 20% down, and the full PITI typically lands between $2,500 and $2,900/month for that same home.
The four levers that move your payment are home price, down payment percentage, loan term, and interest rate. A 15-year mortgage at 5.65% costs ~37% more per month but pays down the loan more than twice as fast and eliminates roughly half the lifetime interest.
The uncomfortable math: On a $320,000 loan at 6.30% over 30 years, you pay $393,000 in interest on top of the principal — more than the home itself cost. Every 0.5% rate drop on that loan saves roughly $37,000 in lifetime interest and $105/month.
How Do You Compare?
UPDATES LIVEShowing the national median mortgage payment. Click Calculate to see where you stand.
Affordability Benchmarks
LIVE DATA fincalcs.coSource: NAR, Census Bureau, Federal Reserve 2026
Current Mortgage Rate Environment
LIVE DATARates pulled from the Freddie Mac Primary Mortgage Market Survey (PMMS), published weekly. FRED series MORTGAGE30US and MORTGAGE15US.
| Loan Product | Avg Rate (Apr 16, 2026) | Year Ago | 52-Week Range |
|---|---|---|---|
| 30-year fixed (conforming) | 6.30% | 6.83% | 6.08% – 7.04% |
| 15-year fixed (conforming) | 5.65% | 6.03% | 5.42% – 6.27% |
| 30-year fixed (jumbo) | 6.61% | 7.04% | 6.38% – 7.21% |
| FHA 30-year | 6.05% | 6.58% | 5.82% – 6.74% |
| VA 30-year | 5.78% | 6.29% | 5.55% – 6.48% |
| 10-Year Treasury benchmark | 4.26% | 4.38% | 3.74% – 4.71% |
Source: Freddie Mac PMMS, FRED (Federal Reserve Bank of St. Louis), MORTGAGE30US / MORTGAGE15US / GS10 series, retrieved April 2026. Rates represent national averages for borrowers with excellent credit (740+) and 20% down.
Rate watch: The next Federal Reserve FOMC meeting is April 28–29, 2026. Mortgage rates typically react to Fed decisions within 1–2 business days via the 10-year Treasury yield.
How Each Lever Moves Your Payment
Rate. On a $320,000 loan, every 0.25% change in rate shifts your monthly payment by about $53 and your lifetime interest by $19,000. The difference between 6.0% and 7.0% is $201/month and $72,000 over 30 years.
Term. A 15-year loan at 5.65% costs $2,635/month vs $1,980/month at 30 years (6.30%) — that's $655/month more, but you save roughly $210,000 in lifetime interest and own the home 15 years sooner.
Down payment. Putting 20% down on a $400,000 home ($80,000) eliminates PMI (~$213/month on a 0.8% rate × $320K loan). Anything less than 20% triggers PMI until you reach 78% loan-to-value by federal law.
Taxes and insurance. Property tax averages 1.1% nationally but ranges from 0.3% (Hawaii) to 2.5% (New Jersey, Illinois). Homeowners insurance averages $1,700–$2,200/year nationally — 2–3x higher in hurricane zones and wildfire regions. Together these typically add $400–$700/month to your base P&I.
Monthly Payment by Loan Amount & Rate
SENSITIVITYPrincipal + interest only, 30-year fixed. Add ~$300–$700/month for taxes, insurance, and PMI if applicable.
| Loan Amount | 5.50% | 6.00% | 6.30% | 6.75% | 7.25% |
|---|---|---|---|---|---|
| $200,000 | $1,136 | $1,199 | $1,238 | $1,297 | $1,364 |
| $300,000 | $1,703 | $1,799 | $1,857 | $1,946 | $2,046 |
| $400,000 | $2,271 | $2,398 | $2,476 | $2,594 | $2,728 |
| $500,000 | $2,839 | $2,998 | $3,095 | $3,243 | $3,411 |
| $600,000 | $3,407 | $3,597 | $3,714 | $3,891 | $4,093 |
| $750,000 | $4,259 | $4,497 | $4,642 | $4,864 | $5,116 |
Key insight: A 1% rate difference on a $400,000 loan = $254/month = $91,000 over 30 years. Shopping 3 lenders typically yields 0.25–0.5% in savings, or $85–$170/month.
2026 Conforming Loan Limits & PMI Thresholds
FHFA 2026The FHFA raised 2026 conforming loan limits by 3.26% from 2025 — staying under these saves 0.25–0.50% on your rate vs jumbo financing.
| Property Type | Baseline (most counties) | High-Cost Areas |
|---|---|---|
| 1-unit (single family) | $832,750 | up to $1,249,125 |
| 2-unit (duplex) | $1,066,000 | up to $1,599,000 |
| 3-unit (triplex) | $1,288,875 | up to $1,933,350 |
| 4-unit (fourplex) | $1,601,450 | up to $2,402,175 |
PMI: when it starts and ends
Private mortgage insurance is required when your down payment is less than 20%. Typical cost is 0.5–1.5% of the loan balance per year, paid monthly.
- 78% LTV: Lender must automatically cancel PMI when your loan balance reaches 78% of the original home value (Homeowners Protection Act of 1998).
- 80% LTV: You can request PMI cancellation in writing once you reach 80% LTV via payments or appraisal-verified appreciation.
- Refinance: If home values rise, refinancing below 80% LTV removes PMI faster than waiting for amortization to catch up.
Source: FHFA 2026 Conforming Loan Limit Values (released Nov 25, 2025); Homeowners Protection Act of 1998 (PMI automatic cancellation at 78% LTV).
The Math Behind Your Mortgage Payment
TRANSPARENT1. Loan amount = Price − Down payment
Loan = HomePrice × (1 − DownPayment%) On a $400,000 home with 20% down: $400,000 × 0.80 = $320,000 loan.
2. Monthly payment = standard amortization formula
M = L × [r(1+r)^n] / [(1+r)^n − 1] where L is the loan, r is the monthly rate (annual ÷ 12), and n is the total number of months. Every P&I calculation uses this formula.
3. Full PITI = P&I + Tax + Insurance + PMI + HOA
Lenders qualify you on the full PITI, not just principal and interest. Property tax = (HomePrice × TaxRate%) / 12. PMI = (Loan × PMIRate%) / 12 only if down payment < 20%.
4. Amortization: interest front-loaded
On a 30-year loan, roughly 65% of your first year's payments go to interest, only 35% to principal. This ratio flips around year 18. Extra principal payments early have outsized impact — $100/month extra on a $320K loan at 6.30% saves about $66,000 and cuts the payoff by 4 years.
How Your Mortgage Connects to the Rest of Your Plan
CONNECTEDThe mortgage isn't one decision — it cascades into tax, savings, retirement, and refinance moves.
Mortgage Readiness Matrix
Five factors lenders weigh — and what to do about each.
| Factor | Status | Benchmark | What To Do |
|---|---|---|---|
| Credit score | Key | 740+ for best rates | Each 20-point band above 680 can save 0.125–0.25% on rate. Pull your score free before applying. |
| Debt-to-income | Gate | ≤43% total, ≤36% conv | Conventional loans cap total DTI at 43–45%. Pay down credit cards and small loans before applying. |
| Down payment | 20% sweet spot | 20% avoids PMI | Below 20% triggers PMI (0.5–1.5%/yr). FHA allows 3.5% with permanent MIP. Do the math both ways. |
| Loan size | Limit | <$832,750 conforming | Staying below the 2026 conforming limit saves 0.25–0.50% vs jumbo. Consider larger down if just over. |
| Reserves | Cushion | 2–6 months PITI | Lenders prefer 2 months reserves; jumbo requires 6. Homeowners need a bigger buffer than renters for repairs. |
Five Mortgage Mistakes to Avoid
| The Mistake | What It Actually Costs |
|---|---|
| Only getting one rate quote Taking your bank's first offer | $85–$170/month on $400K loan Freddie Mac's own research shows borrowers save $600–$1,200/year by comparing 3+ lenders. Shopping in a 45-day window counts as a single credit pull. |
| Ignoring points vs rate tradeoff Accepting par rate without running break-even | $10K+ over loan life 1 point (1% of loan) typically buys a 0.25% rate cut. On $400K, that's $4,000 upfront for $63/month savings. Break-even: ~5 years — worth it only if you'll stay 7+ years. |
| Skipping the conforming limit check Borrowing $5K over limit for a jumbo loan | 0.25–0.50% higher rate = $20K+ On a $835K loan, going jumbo instead of larger down payment costs $105–$210/month. Pay $2,250 more down to stay conforming and save $38K+ lifetime. |
| Not recasting after large principal payments Paying extra without requesting re-amortization | Principal paid, payment unchanged Lenders allow recasting (typically $250 fee) to lower monthly P&I after a lump-sum payment. Without recast, extra payment accelerates payoff but doesn't drop monthly cost. |
| Underestimating total PITI Budgeting for P&I only, ignoring tax/insurance | $400–$700/month surprise Principal and interest is usually just 65–75% of the full payment. Property tax, insurance, PMI, and HOA add the rest. Always run full PITI before house hunting. |
Sources: Freddie Mac Research (multi-lender shopping savings 2024), CFPB mortgage origination data 2024, FHFA Conforming Loan Limits 2026.
What Should You Do Next?
UPDATES LIVEThree highest-leverage actions before you apply.
Rate changes, refi alerts, and housing-market context every Monday.
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Learn More About Mortgages
Things to Know
Essential concepts for understanding your results
FormulaWhat is the formula for a mortgage calculator?
The standard mortgage payment formula is M = P × [r(1+r)n] / [(1+r)n – 1], where M is the monthly payment, P is the principal loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (years × 12). On a $300,000 loan at 6.5% for 30 years: r = 0.00542, n = 360, giving M = $1,896 per month in principal and interest.
TypesWhat are the different types of mortgage calculators?
Payment calculators estimate your monthly principal and interest. Affordability calculators determine how much house you can buy based on income and debts. Refinance calculators compare your current loan to a new one. Amortization calculators show how each payment splits between principal and interest over time. Biweekly calculators show savings from paying every two weeks instead of monthly.
LimitationsWhat are the limitations of a mortgage calculator?
Calculators estimate principal and interest but often exclude property taxes, homeowners insurance, PMI, and HOA fees — which can add $500-1,500 per month to total housing costs. They assume a fixed rate for the entire term and do not account for potential rate changes on ARMs. They also cannot predict future home values, maintenance costs, or changes in tax law that affect deductibility.
Key FactorsWhat are the key factors in a mortgage calculator?
The four inputs that most impact your payment: Loan amount — every $10,000 borrowed adds approximately $63 per month at 6.5%. Interest rate — a 0.5% rate difference changes payments by $85-95 per month on $300,000. Loan term — 15-year payments are 40-50% higher than 30-year but save $100,000+ in interest. Down payment — putting 20% down eliminates PMI, saving $100-300 per month.
When to UseWhen should you use a mortgage calculator?
Use a mortgage calculator before house shopping to set a realistic budget, when comparing loan offers from different lenders, when deciding between 15-year and 30-year terms, when evaluating the impact of a larger down payment, and when considering refinancing your existing mortgage. Run calculations at multiple interest rates to stress-test affordability if rates change before you lock.
What Is a Mortgage Payment?
Whether you are looking for a mortgage payment estimator, calculate mortgage payment, how to calculate mortgage payment, free mortgage payment calculator, mortgage payment mortgage, or home mortgage payment — this free mortgage payment calculator provides accurate estimates to help you plan and make informed financial decisions.
A mortgage payment consists of four components, often called PITI: Principal (the amount that reduces your loan balance), Interest (the cost of borrowing), Taxes (property taxes collected monthly into escrow), and Insurance (homeowners insurance and possibly PMI). Understanding each component helps you budget accurately and identify opportunities to reduce your total housing cost.
On a $350,000 loan at 6.5% over 30 years, your monthly principal and interest payment is approximately $2,212. Add $300/month for property taxes and $150/month for insurance, and your full PITI payment reaches $2,662/month. In the first year, roughly 80% of your P&I payment goes to interest — only $520/month actually reduces your balance. This ratio gradually shifts over the life of the loan through amortization.
How Interest Rate Affects Your Payment
Interest rate is the single largest controllable factor in your mortgage cost. On a $350,000 30-year loan:
At 5.5%: $1,987/month — total interest paid over 30 years: $365,340
At 6.5%: $2,212/month — total interest paid: $446,247
At 7.5%: $2,447/month — total interest paid: $531,064
That 2-point difference between 5.5% and 7.5% costs an extra $460/month and $165,724 over the life of the loan. This is why even a 0.25% rate reduction through shopping multiple lenders, improving your credit score, or buying mortgage points can save tens of thousands of dollars.
The Mortgage Payment Formula Explained
Your monthly payment is calculated using the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n - 1], where P is the principal loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (years × 12).
This formula ensures each payment covers the interest due that month plus a portion of principal, with the split gradually shifting toward more principal over time. In year 1 of a $350,000 loan at 6.5%, you pay approximately $22,600 in interest and only $3,940 in principal. By year 25, you pay approximately $5,900 in interest and $20,600 in principal — nearly the reverse.
15-Year vs 30-Year Mortgage
A 15-year mortgage typically offers a 0.5-0.75% lower interest rate and dramatically reduces total interest paid, but requires higher monthly payments. On $350,000:
30-year at 6.5%: $2,212/month — total interest: $446,247
15-year at 5.8%: $2,918/month — total interest: $175,243
The 15-year mortgage costs $706 more per month but saves $271,004 in interest and builds equity twice as fast. Choose 15 years if you can comfortably afford the higher payment while still maxing retirement contributions. Choose 30 years if you need cash flow flexibility or can invest the $706 difference at returns exceeding your mortgage rate.
2026 Mortgage Market Context
As of early 2026, 30-year fixed mortgage rates are in the 6.0-7.0% range, significantly higher than the historic lows of 2020-2021 (2.65-3.25%). This rate environment means affordability is tighter — the same $2,000/month payment that bought a $400,000 home at 3% now buys approximately $300,000 at 6.5%.
Key 2026 considerations: The SALT deduction cap has been raised to $40,000 (from $10,000), making itemizing more attractive for homeowners in high-tax states. FHA loan limits have increased in most counties. And the standard deduction is now $16,100 (single) / $32,200 (married), meaning you only benefit from the mortgage interest deduction if your total itemized deductions exceed these amounts.
Frequently Asked Questions
How to Use This Mortgage Calculator
This calculator estimates your monthly mortgage payment including principal, interest, property taxes, and insurance. Here's how to get the most accurate result from each field:
1. Enter the home price. Use the listing price of a home you're considering, or the maximum amount you want to spend. In competitive markets, you may need to offer above asking price. In slower markets, you might offer below. Work with a real estate professional to determine your offer strategy. If you're just exploring, try different price points to see how they affect your monthly payment.
2. Choose a down payment. The default is 20%, which avoids private mortgage insurance (PMI). However, many loan programs accept less: FHA loans require just 3.5%, VA loans require 0%, and USDA loans also offer zero down. A larger down payment means a lower monthly payment and less total interest paid, but waiting years to save 20% isn't always the best financial move. Use our Down Payment Calculator to plan your savings timeline.
3. Select your loan term. The most common terms are 30 years (lower monthly payment, more total interest) and 15 years (higher monthly payment, dramatically less total interest). On a $350,000 loan at 6.75%, a 30-year mortgage costs $2,270/month but $467,000 in total interest. A 15-year mortgage costs $3,095/month but only $207,000 in total interest — saving $260,000. Compare both with our 15 vs 30 Year Calculator.
4. Enter your interest rate. Check the rate tables below for current averages based on your credit score. Enter the interest rate, not the APR — the APR includes additional fees and will give you an inflated payment estimate. Your actual rate depends on your credit score, down payment, loan type, and market conditions. Always get quotes from at least three lenders — rate shopping within a 14-day window counts as a single credit inquiry.
5. Add property taxes and insurance. These are often overlooked but can add $300-$800/month to your payment. Property tax rates vary significantly by state and county — check our Property Tax by State Calculator for estimates. Homeowners insurance typically costs $1,500-$3,500/year depending on location and coverage. Most lenders require both to be paid through an escrow account as part of your monthly payment.
What Impacts Your Monthly Mortgage Payment
Your monthly payment has four components, collectively called PITI: Principal (reducing your loan balance), Interest (the cost of borrowing), Taxes (property taxes), and Insurance (homeowners + PMI if applicable). Understanding each helps you identify where to focus when trying to lower your payment.
Loan amount is the single biggest factor. It's determined by your home price minus your down payment. Every $10,000 reduction in loan amount saves approximately $65/month on a 30-year loan at 6.75%.
Interest rate determines how much you pay for the privilege of borrowing. A seemingly small rate difference has massive impact: on a $350,000 loan, the difference between 6.5% and 7.0% is $118/month and $42,000 over 30 years. Your rate is primarily determined by your credit score, your loan-to-value ratio, the loan type, and market conditions. Buying mortgage points can lower your rate by prepaying interest at closing.
Loan term affects the trade-off between monthly payment and total cost. Shorter terms mean higher payments but dramatically less interest. A 15-year mortgage typically comes with a rate 0.5-0.75% lower than a 30-year, compounding the savings.
Property taxes vary enormously by location — from 0.28% of home value in Hawaii to 2.47% in New Jersey. On a $400,000 home, that's a difference of $730/month. Taxes can change annually based on assessed value and local mill rates. Check rates for your area with our Property Tax Calculator.
Insurance costs include homeowners insurance (required by lenders) and PMI (required if you put less than 20% down). PMI typically costs 0.3-1.5% of the loan amount annually and can be removed once you reach 20% equity. You can track your equity progress with our LTV Calculator.
How Much House Can I Afford?
Lenders and financial advisors use the 28/36 rule to determine how much house you can afford. Your total monthly housing payment (PITI) should not exceed 28% of gross monthly income, and your total monthly debt payments should not exceed 36% of gross income.
| Annual Income | Max Monthly Housing (28%) | Max Total Debt (36%) | Estimated Home Price* |
|---|---|---|---|
| $50,000 | $1,167 | $1,500 | $185,000 |
| $75,000 | $1,750 | $2,250 | $285,000 |
| $100,000 | $2,333 | $3,000 | $385,000 |
| $125,000 | $2,917 | $3,750 | $480,000 |
| $150,000 | $3,500 | $4,500 | $575,000 |
*Estimated with 20% down, 6.75% rate, 30-year term, 1.2% property tax, $1,800/yr insurance
Your debt-to-income ratio (DTI) is one of the most important qualification factors. Most lenders require a DTI below 43%, though some programs accept up to 50%. Calculate your exact affordability with our Home Affordability Calculator, or see salary-specific guides: $60K, $75K, $100K, $150K, $200K.
Many financial advisors recommend a more conservative 25% rule — limiting housing costs to 25% of take-home (not gross) pay. This leaves more room for savings, emergencies, and lifestyle. Calculate your take-home with our Take-Home Pay Calculator.
Current Mortgage Interest Rates (2026)
Mortgage rates change daily. As of early 2026, average rates for a $350,000 mortgage with 20% down:
| Mortgage Type | Average Rate | Monthly P&I on $350K | Total Interest (30yr) |
|---|---|---|---|
| 30-Year Fixed (Conventional) | 6.58% | $2,229 | $452,440 |
| 15-Year Fixed (Conventional) | 5.71% | $2,908 | $173,440 |
| 5/6 ARM | 6.32% | $2,171 | Varies after 5yr |
| FHA 30-Year | 6.30% | $2,167 + MIP | $430,120 + MIP |
| VA 30-Year | 6.15% | $2,133 | $417,880 |
Use our APR Calculator to compare the true cost of different offers, including origination fees and points.
Mortgage Rates by Credit Score
Your credit score is the single biggest factor in the rate you'll receive. Here's how scores translate to rates on a 30-year conventional mortgage (2026 averages):
| FICO Score | 30-Year Rate | Monthly Payment* | Extra Cost vs. Best Rate |
|---|---|---|---|
| 620 | 7.14% | $2,361 | +$48,960 |
| 660 | 6.88% | $2,299 | +$26,640 |
| 700 | 6.63% | $2,240 | +$12,600 |
| 720 | 6.58% | $2,229 | +$8,280 |
| 740 | 6.44% | $2,196 | +$4,320 |
| 780+ | 6.25% | $2,184 | Best rate |
*On a $350,000 30-year conventional loan. "Extra cost" = total additional interest over the life of the loan vs. 780+ score.
The difference between a 620 and 780 credit score is $49,000 in extra interest over 30 years — or $136/month. Improving your score before applying can save thousands. Even a 20-point improvement can drop your rate 0.125-0.25%. See how your credit affects your overall financial picture.
Types of Mortgages
Conventional Loans are not government-backed. They require a minimum 620 credit score, 3-20% down payment, and DTI below 43-50%. Conventional loans offer the most flexibility and account for roughly 70% of all mortgages. If you put less than 20% down, you'll pay PMI until you reach 20% equity. Use our Mortgage Calculator for conventional loan estimates.
FHA Loans are insured by the Federal Housing Administration. Key features: 3.5% minimum down (with 580+ score), credit scores as low as 500 accepted (with 10% down), and more lenient DTI requirements. The trade-off: upfront mortgage insurance premium (1.75% of loan amount) plus annual MIP (0.15-0.75%) for the life of the loan with less than 10% down. Best for buyers with lower credit scores or limited savings.
VA Loans are available to eligible veterans, active-duty service members, and surviving spouses. Zero down payment, no PMI, competitive rates (typically 0.25-0.5% below conventional), and no prepayment penalties. A VA funding fee (1.25-3.3%) applies but can be rolled into the loan. Widely considered the best mortgage product available for those who qualify.
USDA Loans offer zero-down-payment financing for properties in eligible rural and suburban areas (roughly 97% of U.S. land area qualifies). Income limits apply (typically 115% of area median income). Lower rates than conventional loans plus a modest guarantee fee.
Jumbo Loans exceed the conforming limit ($766,550 in most areas for 2026). They typically require 700+ credit scores, 10-20% down, and significant cash reserves. Rates may be slightly higher than conforming loans.
Fixed-Rate vs. Adjustable-Rate Mortgages
A fixed-rate mortgage locks your rate for the entire term. Your principal and interest payment never changes, making budgeting predictable. In 2026, with 30-year fixed rates around 6.5-6.75%, a fixed rate protects you if rates rise further.
An adjustable-rate mortgage (ARM) starts with a lower rate for a fixed period (typically 5, 7, or 10 years), then adjusts periodically. A 5/1 ARM might start at 6.0-6.3% versus 6.5-6.75% for a 30-year fixed — saving $100-$150/month initially. ARMs make sense if you plan to sell or refinance before the adjustment period, or expect rates to decline.
ARMs have rate caps limiting increases: typically 2% per adjustment and 5-6% over the life of the loan above the initial rate. In a worst-case scenario, a 6.0% ARM could eventually reach 11-12% — make sure you can afford the maximum possible payment before choosing an ARM.
Down Payment Options
| Down Payment | Loan Type | PMI/MIP | On a $400K Home |
|---|---|---|---|
| 20% | Conventional | None | $80,000 |
| 10% | Conventional | ~$140/mo until 78% LTV | $40,000 |
| 3.5% | FHA | 1.75% upfront + 0.55%/yr | $14,000 |
| 3% | Conventional (first-time) | ~$170/mo until 78% LTV | $12,000 |
| 0% | VA/USDA | Funding fee / guarantee fee | $0 |
The math on PMI is often better than waiting: if saving an additional $40,000 for a 20% down payment takes 3 years, and home prices appreciate 3-5% annually during that time, you could pay more for the home than the PMI would have cost. Plan your timeline with our Down Payment Timeline Calculator.
How to Get a Mortgage: Step by Step
Step 1: Check and improve your credit (3-6 months before). Pull your free credit report. Dispute errors, pay down credit card balances below 30% utilization, and avoid opening new accounts. Every 20-point improvement can save 0.125-0.25% on your rate. See how your score affects rates in the table above.
Step 2: Get pre-approved (1-2 months before house hunting). A pre-approval letter verifies your financing and shows sellers you're serious. The lender reviews your income, assets, debts, and credit to determine your maximum loan amount. Get quotes from at least three lenders — rate differences between lenders for identical borrowers average $1,500/year.
Step 3: Find your home and make an offer. Your offer includes purchase price, earnest money (1-3%), contingencies (inspection, appraisal, financing), and desired closing date. Calculate the seller's potential commission with our Real Estate Commission Calculator.
Step 4: Complete the loan application. You'll need: pay stubs (2 months), W-2s or 1099s (2 years), tax returns (2 years), bank statements (2-3 months), employment verification, and photo ID. Self-employed borrowers need additional documentation including profit/loss statements and business tax returns.
Step 5: Home inspection and appraisal. The inspection ($300-$600) identifies problems. The appraisal ($400-$700) confirms the home's value for the lender. If the appraisal comes in low, you may need to renegotiate, increase your down payment, or walk away.
Step 6: Closing. Sign documents, pay closing costs (typically 2-5% of loan amount = $7,000-$17,500 on a $350,000 loan), and receive the keys. Review your final Closing Disclosure at least three days before closing to verify all terms match your Loan Estimate.
Strategies to Save Money on Your Mortgage
Make biweekly payments. Pay half your monthly payment every two weeks instead of the full amount monthly. This adds one extra payment per year, cutting a 30-year mortgage to ~25 years and saving $50,000-$70,000 in interest on a $350,000 loan.
Make extra principal payments. Even $100-$200/month in extra principal has dramatic long-term impact. An extra $200/month on a $350,000 loan at 6.75% saves $74,000 in interest and pays off the loan 6 years early.
Refinance when rates drop. The general rule: refinancing makes sense when you can reduce your rate by 0.75-1%+ and plan to stay long enough to recoup closing costs ($3,000-$6,000). Even a 0.5% reduction on $350,000 saves $100+/month.
Buy mortgage points. Each point costs 1% of the loan amount and typically reduces your rate by 0.25%. On a $350,000 loan, one point costs $3,500 and saves $52/month — breaking even in 67 months. Points make sense if you plan to stay 6+ years.
Avoid PMI creatively. Besides the traditional 20% down, options include piggyback loans (80/10/10), lender-paid PMI (slightly higher rate), or VA/USDA loans (no PMI at all).
Shop property taxes. Rates vary enormously — moving one county over can save $2,000-$5,000/year on the same-priced home. Use our Property Tax by State Calculator to compare.
Consider renting vs. buying. In expensive markets where price-to-rent ratios exceed 20, renting and investing the difference can be financially superior. Run the comparison with our Rent vs. Buy Calculator.
Common Mortgage Mistakes to Avoid
Buying at the top of your approval. Just because a lender approves you for $500,000 doesn't mean you should borrow that much. Budget 1-2% of home value annually for maintenance, keep an emergency fund, and leave room for lifestyle expenses. Use our 50/30/20 Budget Calculator to see how a mortgage fits your full financial picture.
Ignoring total cost. A $350,000 loan at 6.75% for 30 years costs $467,000 in total interest — more than the home itself. Understanding total cost changes how you evaluate loan terms, rates, and extra payments.
Not comparing lenders. Rate variation between lenders for identical borrowers is significant. Even 0.25% difference on $350,000 is $17,000 over 30 years. Get at least three quotes.
Skipping the inspection. In competitive markets, waiving inspections is tempting but dangerous. A $400 inspection can uncover $50,000+ in needed repairs.
Draining savings for the down payment. Lenders want 2-6 months of reserves after closing. More importantly, you need an emergency fund. Becoming house-poor is the fastest path to financial stress.
Making large purchases before closing. Buying a car, furniture, or appliances on credit before closing can change your DTI ratio and jeopardize your mortgage approval. Wait until after you have the keys.
Mortgage Payment Formula
The standard amortization formula calculates your fixed monthly principal and interest payment:
M = P × [r(1+r)n] / [(1+r)n − 1]
Where: M = monthly payment, P = principal (loan amount), r = monthly interest rate (annual rate ÷ 12), n = total number of payments (years × 12).
Example: $350,000 loan at 6.75% for 30 years → P = 350,000, r = 0.0675/12 = 0.005625, n = 360. M = $350,000 × [0.005625 × 1.005625360] / [1.005625360 − 1] = $2,270/month.
This formula only calculates principal and interest. Add property taxes (~$350/month), insurance (~$150/month), and PMI if applicable (~$140/month) for your total monthly payment. View your full payment schedule with our Amortization Calculator.
Mortgage Glossary
Amortization — The process of paying off a loan through regular payments. Early payments are mostly interest; later payments are mostly principal. View your schedule with our Amortization Calculator.
APR (Annual Percentage Rate) — The true annual cost of borrowing, including interest plus lender fees. Always higher than the interest rate. Compare offers using APR, not just the rate.
Appraisal — A professional estimate of a home's market value, required by lenders to ensure the property is worth the loan amount. Typically costs $400-$700.
Closing Costs — Fees paid at closing, typically 2-5% of the loan amount. Includes origination fees, title insurance, appraisal, attorney fees, and prepaid items.
Conforming Loan — A mortgage that meets Fannie Mae/Freddie Mac guidelines, including the loan limit ($766,550 in most areas for 2026). Loans exceeding this are jumbo loans.
Down Payment — The upfront cash you pay toward the home's purchase price. Ranges from 0% (VA/USDA) to 3% (conventional) to 20%+ (no PMI).
Escrow — An account held by your loan servicer to pay property taxes and insurance on your behalf. A portion of each monthly payment goes into escrow.
Equity — The portion of your home's value that you own outright (market value minus mortgage balance). Grows as you pay down the loan and as property values appreciate. Access it with a HELOC or home equity loan.
LTV (Loan-to-Value) — Your loan amount divided by the property value. An 80% LTV means 20% down payment. PMI is required above 80% LTV for conventional loans.
Mortgage Points — Prepaid interest that reduces your rate. Each point = 1% of loan amount, typically reducing the rate by 0.25%.
PMI (Private Mortgage Insurance) — Required on conventional loans with less than 20% down. Costs 0.3-1.5% of the loan amount annually. Automatically removed at 78% LTV.
Preapproval — A lender's conditional commitment to lend you a specific amount, based on verified income, assets, and credit. Stronger than prequalification and preferred by sellers.
Refinance — Replacing your existing mortgage with a new one, typically to get a lower rate, change the term, or access equity (cash-out refinance).
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The Complete Guide to Mortgage Payments
Whether you searched for a mortgage calculator, mortgage payment calculator, home loan calculator, house payment calculator, monthly mortgage calculator, mortgage estimator, home mortgage calculator, or mortgage interest calculator — this comprehensive guide explains every factor that determines your monthly mortgage payment. Use this tool as a mortgage affordability calculator, mortgage comparison calculator, or mortgage amortization calculator to estimate payments, compare loan scenarios, and understand the true cost of homeownership.
Your mortgage payment is typically the single largest monthly expense in your household budget — and the terms you negotiate at closing lock in that expense for 15 to 30 years. Understanding how principal, interest, taxes, insurance, and PMI combine into your total payment empowers you to make decisions that save tens of thousands of dollars over the life of your loan. A 0.5% rate difference on a $350,000 mortgage saves approximately $36,000 over 30 years. A 20% down payment versus 10% eliminates PMI and saves another $30,000+. These are the decisions this guide helps you navigate.
Understanding PITI: The Four Parts of Your Payment
Your monthly mortgage payment consists of four components, collectively known as PITI:
| Component | Typical % of Payment | Example ($350K home, 6.5%, 20% down) |
| Principal | 20-35% | Starts at ~$420/mo, grows over time |
| Interest | 40-55% | Starts at ~$1,517/mo, shrinks over time |
| Taxes (Property) | 10-20% | ~$365/mo (varies by location) |
| Insurance (Homeowners) | 5-10% | ~$150/mo (varies by location and coverage) |
On a $280,000 mortgage (after 20% down on a $350,000 home) at 6.5% for 30 years, the principal and interest payment is approximately $1,770/month. Add property taxes ($365/mo) and homeowners insurance ($150/mo), and the total PITI is approximately $2,285/month. If your down payment is less than 20%, add PMI ($100-$250/month) for a total of $2,385-$2,535. This total PITI — not just the principal and interest — is what you should use when evaluating affordability.
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