Mortgage Calculator
Calculate your monthly mortgage payment, total interest paid, and get AI-powered insights to help you make smarter home buying decisions.
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⚖️ Compare 3 Mortgage Scenarios
See how different rates, terms, and down payments affect your payment
🏠 Base Information
Conservative
Moderate
Aggressive
🏆 Comparison Results
Frequently Asked Questions
Your monthly mortgage payment is calculated using the loan amount, interest rate, and loan term. The formula considers the principal (loan amount), the monthly interest rate, and the total number of payments. Additional costs like property tax and insurance are added to get your total monthly payment.
A 20% down payment is often recommended because it helps you avoid Private Mortgage Insurance (PMI), which typically costs 0.5-1% of the loan annually. However, many lenders accept down payments as low as 3-5%. A larger down payment means lower monthly payments and less interest over time.
15-year mortgage: Higher monthly payments, but you'll pay significantly less interest overall and build equity faster. Great if you can afford the payments.
30-year mortgage: Lower monthly payments, more flexibility in your budget, but you'll pay more interest over time. You can always make extra payments to pay it off faster.
The general rule is the 28/36 rule: your mortgage payment should be no more than 28% of your gross monthly income, and your total debt payments should be no more than 36%. This helps ensure you have enough money for other expenses and savings.
You can lower your monthly payment by: (1) Making a larger down payment, (2) Choosing a longer loan term, (3) Shopping for a lower interest rate, (4) Buying a less expensive home, (5) Improving your credit score before applying for a mortgage to qualify for better rates.
📚 Complete Guide to Mortgages
🏠 Understanding Mortgages
A mortgage is a loan specifically designed to purchase real estate. Unlike other loans, your home serves as collateral—meaning the lender can take the property if you fail to make payments (foreclosure).
Your monthly payment typically includes four components, known as PITI:
- Principal: Pays down your loan balance
- Interest: The cost of borrowing
- Taxes: Property taxes (often escrowed)
- Insurance: Homeowners insurance (often escrowed)
📊 Real-World Example
Scenario: Buying a $350,000 home with 20% down at 6.5% for 30 years.
💡 You'll pay more in interest than the original loan amount over 30 years!
🎯 When to Use This Calculator
- House hunting: Determine what you can afford before shopping
- Comparing homes: See how different prices affect your payment
- Rate shopping: Compare offers from different lenders
- Refinancing: See if refinancing makes sense
- Extra payments: Calculate the impact of paying more
- Financial planning: Budget for homeownership costs
⚠️ Common Mistakes to Avoid
- Forgetting extra costs: Property tax, insurance, HOA, and maintenance can add 30-50% to your base payment
- Maxing out your budget: Just because you're approved doesn't mean you should borrow the max
- Ignoring PMI: Putting less than 20% down adds $100-$300/month in insurance
- Not shopping rates: A 0.5% rate difference can cost $30,000+ over the loan
- Skipping pre-approval: Know your budget before falling in love with a home
- Forgetting closing costs: Budget 2-5% of home price for closing
📋 Types of Mortgages
Conventional
Standard loans not backed by government. Requires higher credit scores (620+) and typically 3-20% down.
FHA Loans
Government-backed, easier to qualify. Only 3.5% down required, credit scores as low as 580.
VA Loans
For veterans and military. No down payment required, no PMI, competitive rates.
USDA Loans
For rural areas. No down payment required, income limits apply.
💰 Pro Tips to Save Money
- Boost your credit score: 740+ gets you the best rates. Even 20 points can save thousands.
- Make bi-weekly payments: Pay half your mortgage every two weeks instead of monthly. You'll make one extra payment per year and pay off years early.
- Round up payments: Paying $1,800 instead of $1,750? That extra $50/month can shave 3+ years off your loan.
- Skip the 30-year: A 15-year mortgage has higher payments but saves 50%+ on interest.
- Refinance strategically: If rates drop 0.75-1%, refinancing often makes sense.
- Consider points: Paying 1% upfront can reduce your rate by 0.25%. Worth it if you're staying 5+ years.