Mortgage Calculator
Calculate your monthly mortgage payment including principal, interest, taxes, and insurance. See total cost and amortization schedule.
Complete Mortgage Payment Guide
Understanding mortgage payments is crucial when buying a home. This calculator helps you determine monthly payments and total cost based on home price, down payment, interest rate, and loan term. Mortgages are typically the largest financial commitment most people make, so it's essential to understand all components of your payment.
Components of a Mortgage Payment (PITI)
Your total monthly mortgage payment includes four main components:
- Principal: The amount borrowed, gradually paid down over time
- Interest: The cost of borrowing money from the lender
- Taxes: Property taxes collected by your local government (usually 1-2% of home value annually)
- Insurance: Homeowners insurance to protect your property
If your down payment is less than 20%, you'll also pay PMI (Private Mortgage Insurance), adding $30-$70 per month per $100,000 borrowed.
How Much House Can You Afford?
Lenders use the 28/36 rule:
- Housing costs should not exceed 28% of gross monthly income
- Total debt payments should not exceed 36% of gross monthly income
For example, with $6,000 monthly gross income, your maximum mortgage payment should be $1,680 (28%), and total debt payments including car loans, credit cards, and mortgage should not exceed $2,160 (36%).
Down Payment Strategies
20% Down: Avoids PMI, better interest rates, lower monthly payments, instant equity
10-15% Down: Requires PMI but achieves homeownership sooner
3.5-5% Down: FHA and conventional low down payment options, highest PMI costs
Choosing Your Mortgage Term
30-Year Mortgage: Lower monthly payments, maximum flexibility, significantly more interest paid over time. Popular for first-time buyers and those prioritizing cash flow.
15-Year Mortgage: Higher monthly payments, builds equity fast, saves tens of thousands in interest. Best for those who can afford higher payments and want to own their home outright sooner.
Example: $300,000 mortgage at 7% interest
- 30-year: $1,995/month, $418,527 total interest
- 15-year: $2,696/month, $185,329 total interest (saves $233,198!)
Current Mortgage Rates in 2024
Mortgage rates fluctuate based on economic conditions, Federal Reserve policy, and your individual credit profile. As of 2024:
- Excellent credit (760+): 6.5-7.0%
- Good credit (700-759): 7.0-7.5%
- Fair credit (650-699): 7.5-8.5%
- Poor credit (below 650): 8.5%+ or may not qualify
Ways to Lower Your Mortgage Payment
- Larger down payment: Reduces loan amount, may avoid PMI, and often secures better interest rates
- Improve credit score: Even a 50-point increase can lower your rate by 0.25-0.5%
- Shop multiple lenders: Rates vary by lender; comparing can save thousands
- Consider points: Paying upfront to lower your interest rate may save money long-term
- Choose a longer term: 30-year vs 15-year lowers monthly payment but increases total interest
Hidden Costs of Homeownership
Beyond your mortgage payment, budget for:
- Maintenance: 1-2% of home value annually ($3,000-$7,000 for a $350,000 home)
- HOA fees: $100-$500+ monthly in planned communities
- Utilities: Higher than renting, especially for larger homes
- Closing costs: 2-5% of purchase price ($7,000-$17,500 for $350,000 home)
When to Refinance Your Mortgage
Consider refinancing when:
- Interest rates drop by at least 0.75-1%
- Your credit score has improved significantly
- You want to switch from ARM to fixed-rate
- You've reached 20% equity and want to remove PMI
- You want to shorten your term (30-year to 15-year)
Calculate if savings exceed closing costs (typically $2,000-$5,000) over time you'll stay in the home.
Pro Tip: Make one extra mortgage payment per year by dividing your monthly payment by 12 and adding that amount to each month's payment. On a $300,000 mortgage at 7%, this saves $70,000 in interest and pays off the loan 4 years early!