Mortgage Calculator: Calculate Monthly Payments & Total Costs
A tool that determines monthly mortgage payments and total costs based on home price, down payment, interest rate, and loan term, helping homebuyers understand their long-term financial commitment.
Mortgage Calculator
Calculate monthly mortgage payments, estimate PMI, and view detailed amortization schedules for your home loan.
Mortgage Payment Summary
Monthly Payment
Loan Amount
Principal & Interest
Property Tax
Home Insurance
PMI
HOA Fees
Payment Breakdown
Principal & Interest
Taxes & Insurance
Other
Understanding Mortgages
- Principal is the amount you borrow
- Interest is the cost of borrowing money
- PMI is required with down payments under 20%
- Property taxes and insurance are often escrowed
- Your credit score affects your interest rate
Smart Mortgage Tips
- 20% down payment avoids PMI
- Compare rates from multiple lenders
- Check your credit score before applying
- Consider total costs, not just monthly payments
- Save for closing costs (2-5% of loan amount)
Mortgage FAQs
Private Mortgage Insurance (PMI) is required when your down payment is less than 20% of the home's value. It protects the lender if you default on the loan. PMI typically costs 0.5% to 1% of the loan amount annually and can be removed once you reach 20% equity in your home.
Your credit score significantly impacts your mortgage rate. For example:
- Excellent (740+): Best rates available
- Good (700-739): Slightly higher rates
- Fair (650-699): Higher rates, may need larger down payment
- Poor (below 650): Much higher rates or may not qualify
Even a 1% difference in rate can mean tens of thousands in additional interest over the loan term.
A typical mortgage payment includes:
1. Principal and Interest (P&I)
2. Property Taxes
3. Homeowners Insurance
4. PMI (if down payment < 20%)
5. HOA fees (if applicable)
This is often referred to as PITI (Principal, Interest, Taxes, Insurance).
15-year vs. 30-year mortgage comparison:
15-Year Advantages:
- Lower total interest paid
- Build equity faster
- Own home sooner
30-Year Advantages:
- Lower monthly payments
- More budget flexibility
- Ability to invest difference
Choose based on your financial goals and budget comfort level.
Mortgage points are upfront fees paid to lower your interest rate. One point costs 1% of the loan amount and typically lowers your rate by 0.25%. Consider points if you:
1. Plan to stay in the home long-term
2. Have cash available at closing
3. Will break even on the cost within 5-7 years
Calculate the break-even point by dividing point cost by monthly savings.
General affordability guidelines:
- Monthly payment should not exceed 28% of gross monthly income
- Total debt payments should not exceed 36% of income
- Factor in:
* Down payment and closing costs
* Emergency savings (3-6 months)
* Other housing costs (maintenance, utilities)
* Future plans and lifestyle needs
Closing costs typically range from 2-5% of the loan amount and include:
- Lender fees (application, origination)
- Third-party fees (appraisal, title search)
- Prepaid items (property taxes, insurance)
- Points (if purchasing)
Some costs are negotiable, and some sellers may help with closing costs.
To secure the best mortgage rate:
1. Improve credit score (aim for 740+)
2. Save for larger down payment (20%+)
3. Compare multiple lenders
4. Consider different loan terms
5. Lock rate when favorable
6. Negotiate fees
7. Document all income and assets
8. Keep debt-to-income ratio low