Mortgage Calculator

The math is exact — this calculator uses the same standard amortization formula your lender uses to compute principal and interest. The estimates for property tax, homeowners insurance, and PMI use US national averages and may differ from your actual quote. Property tax especially varies widely by state and county. Always confirm final numbers with your lender.

Private Mortgage Insurance (PMI) is required on conventional loans when your down payment is less than 20% of the home's value. It typically costs 0.3% to 1.5% of your loan amount per year, paid monthly. This calculator estimates PMI at 0.75% annually whenever your down payment falls below 20%.

On a conventional loan, PMI is automatically removed when your loan balance reaches 78% of the original home value. You can also request removal once you reach 80% loan-to-value, either through paying down principal or via appreciation. FHA loans have different MIP rules — most require it for the entire loan term unless you put 10% or more down.

A 15-year mortgage has a higher monthly payment but dramatically less total interest — often less than half what you'd pay over 30 years. A 30-year mortgage has lower monthly payments and more flexibility, but you pay much more interest over time. Pick 15-year if you can comfortably afford the higher payment and want to be debt-free faster. Pick 30-year if you want lower required payments and the option to pay extra when you can.

Lenders refer to this as PITI: Principal, Interest, Taxes, and Insurance. Principal pays down the loan balance; interest is the cost of borrowing; property taxes and homeowners insurance are often collected by your lender and held in escrow. If your down payment was under 20%, PMI is added. HOA dues are separate but should be counted in your total housing cost.

A common rule of thumb is the 28/36 rule: your total monthly housing costs (PITI) should stay below 28% of your gross monthly income, and all your debt payments combined should stay below 36%. Lenders use your debt-to-income ratio (DTI) to make this judgment.

Credit score has one of the largest impacts on the rate you're offered. Borrowers with scores above 760 typically get the best rates. Scores between 700–759 are still strong; 680–699 starts to push rates higher; below 660 you may pay significantly more. The difference between a 740 and a 640 credit score can be 0.5%–1% in rate — over 30 years, tens of thousands of dollars.

The interest rate is the cost of borrowing the principal. The APR (Annual Percentage Rate) includes the interest rate plus most lender fees expressed as a yearly rate, so APR is almost always higher. APR is meant to make loan offers more comparable. This calculator uses interest rate for monthly payment math — APR matters more when comparing two loan offers side by side.

Yes, in nearly all cases. Federal law prohibits prepayment penalties on most owner-occupied mortgages issued after 2014. Making extra principal payments — even one extra payment per year — can shave years off a 30-year loan and save tens of thousands in interest. Confirm with your lender that extra payments are applied to principal, not future interest.

An escrow account is held by your lender to pay property taxes and homeowners insurance on your behalf. Each month, a portion of your mortgage payment goes into escrow; when bills come due, the lender pays them. Escrow is required on most loans with less than 20% down, and can be removed once you've built enough equity.