- How is my monthly mortgage payment calculated?
- The principal-and-interest portion uses the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is loan amount, r is monthly interest rate (annual ÷ 12), and n is total monthly payments (years × 12). On top of that, the calculator adds 1/12 of your annual property tax, 1/12 of your annual home insurance, PMI if applicable, and HOA if applicable. The sum is called PITI (Principal, Interest, Taxes, Insurance).
- What's included in a mortgage payment?
- PITI: Principal (paying down the loan balance), Interest (the lender's profit), property Taxes (held in escrow and paid by the lender), and home Insurance (also escrowed). If your down payment is below 20% on a conventional loan, PMI is added. If your home is in an HOA, the HOA fee is paid separately (not usually escrowed). All five line items show up in the breakdown above.
- How much house can I afford?
- Use the 28/36 rule: housing costs (PITI + HOA) ≤ 28% of gross monthly income, total debt payments ≤ 36% of gross monthly income. So at $8,000/month gross, max housing is ~$2,240/month. A more conservative rule (Dave Ramsey) caps your monthly payment at 25% of take-home pay on a 15-year fixed. The 43% DTI is the regulatory ceiling most lenders won't cross. Enter your numbers in the affordability section above to see your range.
- What are mortgage rates right now (latest)?
- As of early latest, US national averages per Freddie Mac PMMS: ~6.37% for 30-year fixed, ~5.70% for 15-year fixed, ~6.05% for 5/1 ARM. FHA loans average ~6.20%, VA loans ~5.95%, jumbo loans ~6.45%. Your individual quote depends on credit score (760+ gets the best rates), loan-to-value ratio, debt-to-income ratio, and the property's location.
- How much should my down payment be?
- The traditional benchmark is 20% because it eliminates PMI on conventional loans and usually secures the best interest rate. But you don't need 20%: FHA loans accept 3.5% (FICO 580+), conventional has 3% options through HomeReady/Home Possible, and VA/USDA allow 0% down for eligible borrowers. The tradeoff is paying PMI/MIP and higher monthly interest. On a $400K home, 20% down ($80K) cuts your loan by $80K and saves around $90K in lifetime interest vs 10% down at the same rate.
- When does PMI go away?
- Two ways. Automatic: by federal law (Homeowners Protection Act of 1998), your lender must cancel PMI when your loan balance reaches 78% of the original home value. Requested: you can ask for cancellation at 80% LTV, but the lender may require a home appraisal at your expense. On most 30-year loans starting at 5–10% down, PMI lasts 7–11 years before automatic cancellation. FHA MIP is different — on loans with less than 10% down, MIP lasts the entire life of the loan and only goes away if you refinance into a conventional mortgage.
- Should I choose a 15-year or 30-year mortgage?
- 15-year: higher monthly payment, ~0.7% lower interest rate, ~60% less total interest paid, debt-free in half the time. 30-year: lower monthly, more flexibility, longer payoff. On a $320K loan, the 15-year costs $654/month more but saves $241,726 in interest over the life. Hybrid approach: take the 30-year for safety and pay it on a 15-year schedule via extra principal — you keep flexibility if you lose your job.
- How do bi-weekly mortgage payments save me money?
- Bi-weekly means paying half your monthly payment every two weeks. There are 26 bi-weekly periods per year, which equals 13 effective monthly payments instead of 12 — that extra payment goes 100% to principal. On a 30-year mortgage, bi-weekly typically cuts ~5 years off the term and saves tens of thousands in interest. Watch out: some lenders charge a setup fee, and some apply the half-payments monthly (defeating the purpose). The DIY equivalent is dividing your normal monthly payment by 12 and adding that 1/12 to each monthly payment — same effect, no fees.
- How do extra principal payments affect my mortgage?
- Every extra dollar applied to principal directly reduces your loan balance, which means less interest accrued every month after. On a $320,000 30-year loan at a ~6.4% rate, adding just $100/month to principal saves about $59,000 in interest and pays off the loan ~4 years 8 months earlier. Adding $300/month saves $134,000 and shaves off ~10 years. The earlier in the loan you start, the more dramatic the savings — extra payments in year 1 have far more impact than in year 25.
- FHA vs Conventional — which should I choose?
- FHA wins if you have a lower credit score (500–679), less savings (3.5% down OK), or are a first-time buyer. Downsides: MIP for life of loan if <10% down, lower loan limits (~$524K vs ~$767K conventional). Conventional wins if you have 720+ credit and 5–20% down: better rates, PMI drops off at 20% equity, higher loan limits. A common path: start with FHA, build equity for 5–7 years, then refinance into conventional to drop the MIP. Run the same purchase under both in the calculator to see the lifetime cost difference.
- What's the difference between APR and interest rate?
- Interest rate is the actual cost of borrowing the money — what's used to calculate your monthly payment. APR (Annual Percentage Rate) is the interest rate PLUS upfront costs like origination fees, discount points, and mortgage insurance, expressed as an annualized number. APR is always equal to or higher than the interest rate. When comparing loan offers, APR is the truer apples-to-apples comparison because it bakes in closing costs. By law (TILA), every mortgage offer must disclose both.
- When should I refinance my mortgage?
- The traditional rule of thumb is 'refinance when rates drop 1% below your current rate' but the real test is: do total lifetime savings exceed closing costs (typically 2–6% of the loan amount), AND will you stay in the home long enough to recoup those costs? The break-even period = closing costs ÷ monthly savings. If you can recoup costs in under 2–3 years and plan to stay 5+ years, it usually makes sense. Cash-out refinancing to consolidate higher-interest debt is also worth considering when your home has equity.
- Does this calculator work for refinancing?
- Yes. Enter your current remaining balance as the loan amount, the new rate you're being quoted, and the new term. Compare the resulting monthly PITI to your current PITI. Don't forget to subtract the closing costs (estimate 2–5% of the refinanced amount) from the lifetime savings. If the break-even period exceeds how long you plan to stay in the house, it's probably not worth refinancing.
- What credit score do I need for a mortgage?
- Conventional: 620 minimum; 740+ for best rates. FHA: 580 with 3.5% down, or 500 with 10% down. VA: most lenders want 620, some accept 580. Jumbo: 700–740 minimum. Beyond the threshold, every 20-point credit score improvement is typically worth ~0.125%–0.25% in interest rate, which compounds to thousands in lifetime savings. If your score is borderline, paying down credit cards and disputing errors before applying is one of the highest-ROI moves you can make.
- How much is property tax and home insurance typically?
- Property tax: US average is ~1.1% of home value annually, but varies wildly — New Jersey averages 2.5%, Hawaii under 0.3%. Check your county's effective rate. Home insurance: ~$1,400/year on a $400K home nationally (about 0.35%), but doubles or triples in hurricane/wildfire zones. The calculator above lets you enter both as dollar amounts or percentages so you can use either your actual quote or a regional average.
- Is this mortgage calculator free?
- 100% free with no signup, no email required, no credit pull, and zero data sent to any server — every calculation runs locally in your browser. We don't pass your info to lenders or sell it to anyone. Unlike Bankrate and NerdWallet, we don't make money by routing you to mortgage partners — this tool is supported by general site ads, not your data.
