Calculate your monthly mortgage payment including taxes, insurance, and PMI. See exactly how much you'll pay over the life of your loan with a complete amortization schedule.
📊 Current Average Rate: 6.18% (Dec 2024)
Calculate Your Mortgage Payment
Enter your home details below to calculate your monthly payment and see a complete breakdown of costs over the life of your loan.
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Understanding Your Mortgage Payment
A mortgage is likely the largest financial commitment you'll ever make. Understanding exactly what you're paying each month - and over the life of the loan - is crucial to making informed decisions about homeownership.
Components of Your Monthly Payment (PITI)
Principal: This is the amount that goes toward paying down your loan balance. In early years, only a small portion of your payment goes to principal. By the final years, nearly all of your payment is principal. This is how amortization works - you're gradually building equity in your home.
Interest: This is what the lender charges you to borrow money. Interest is calculated on your remaining balance, which is why you pay more interest in early years when the balance is higher. On a 30-year mortgage at 6.5%, you'll typically pay more in total interest than the original loan amount!
Taxes: Property taxes are collected by your local government and typically range from 0.3% to 2.5% of your home's assessed value annually. Most lenders require you to pay 1/12 of your annual tax bill each month into an escrow account, and they pay the government on your behalf when taxes are due.
Insurance: Homeowners insurance protects your home and belongings from damage or theft. Lenders require this to protect their investment. Like property taxes, this is usually paid monthly into escrow. Average cost: $1,500-2,500 annually, but varies significantly by state, home value, and coverage level.
PMI (Private Mortgage Insurance): If you put down less than 20%, you'll pay PMI - typically 0.5-1% of the loan amount annually. This protects the lender if you default. Once you reach 20% equity (through paydown and appreciation), you can request PMI removal. This alone can save $200-400/month!
HOA Fees: If your home is in a community with a homeowners association, you'll pay monthly or annual fees for common area maintenance, amenities, and community services. These aren't part of your mortgage but are a required housing cost. Median: $135/month, but can exceed $500/month in some communities.
How to Use This Calculator
1. Enter Home Price: The total purchase price of the home you're considering. Research comparable sales in your target neighborhood on Zillow, Redfin, or Realtor.com to get accurate estimates.
2. Input Down Payment: The cash you're putting down upfront. Minimum requirements vary: Conventional loans typically require 5-20%, FHA loans allow 3.5%, VA loans (for veterans) can be 0%. Remember: 20% down avoids PMI, saving you thousands over time.
3. Set Interest Rate: Your mortgage rate depends on credit score, down payment, loan term, and market conditions. As of December 2024, average rates are around 6.18% for 30-year fixed mortgages. Check current rates from multiple lenders - even 0.25% difference saves thousands over 30 years.
4. Choose Loan Term: 30-year mortgages have lower monthly payments but much higher total interest. 15-year mortgages have higher payments but you'll own your home faster and pay far less interest - sometimes 50-60% less total interest!
5. Add Property Tax: Check your county assessor's website for typical tax rates in your area. Multiply home price by local tax rate (usually 0.9-1.5%). Example: $400,000 home × 1.1% = $4,400/year.
6. Include Home Insurance: Get quotes from 3-5 insurance companies for accurate estimates. Costs vary by state, home value, coverage level, deductible, and claims history. Coastal areas with hurricane risk pay 2-3x more than inland areas.
7. Add HOA Fees if Applicable: Check the HOA's financial statements and rules before buying. Some HOAs have assessment powers - they can charge one-time fees for major repairs like roof replacement or parking lot resurfacing.
30-Year vs. 15-Year Mortgage Comparison
30-Year Fixed Mortgage
Advantages:
Lower monthly payments (spread over more time)
More manageable budget for expensive homes
Extra cash flow for investing, emergencies, retirement savings
Payment stays same for 30 years (protection from inflation)
More qualification flexibility (lower payment means easier approval)
Less cash flow flexibility for investing or emergencies
Harder to qualify (higher payment means stricter approval)
May force you to buy less house than desired
Example: $300,000 loan at 5.75% for 15 years
Monthly payment: $2,494
Total interest paid: $148,933
Total repaid: $448,933
Head-to-Head Comparison
Savings with 15-year: $233,700 in interest saved!
Cost: $598 higher monthly payment
Break-even analysis: If you invest the $598/month difference at 7% return over 15 years, you'd have $192,000 - still less than the $233,700 interest saved. The 15-year wins financially.
Who should choose 30-year:
Need lower payments to qualify or manage budget
Want flexibility for investing, education, retirement
Expect income growth and plan to make extra payments
Living in expensive market where 15-year is unaffordable
Who should choose 15-year:
Stable income, comfortable with higher payment
Want to eliminate debt quickly
Approaching retirement and want home paid off
Highly disciplined and value forced equity building
How to Get the Best Mortgage Rate
1. Improve Your Credit Score
Your credit score is the single biggest factor affecting your interest rate. Here's the typical impact on a $300,000 mortgage:
760+ credit score: Best rates (6.0% = $1,799/month)
Impact: 760+ score vs. 660 score saves $97/month = $35,000 over 30 years!
How to improve credit fast (3-6 months):
Pay down credit card balances below 30% of limits (under 10% is better)
Pay all bills on time (set up autopay)
Don't apply for new credit cards
Dispute any errors on credit reports
Become authorized user on someone's old account with perfect history
2. Save for 20% Down Payment
Putting 20% down provides multiple benefits:
No PMI: Saves 0.5-1% annually ($125-250/month on $300K loan)
Lower rate: Often 0.125-0.25% better rate
Lower monthly payment: Smaller loan means smaller payment
More equity: Start with 20% equity immediately
Stronger offer: Sellers prefer buyers with larger down payments
If you can't save 20%: Some options still exist. FHA loans require just 3.5% down (but charge MIP for life of loan). Conventional loans allow 5% down (with PMI). Some states/counties offer down payment assistance programs for first-time buyers.
3. Shop Multiple Lenders
Rates vary significantly between lenders. Always get quotes from:
Your current bank: May offer relationship discounts
Compare both rate and fees: A lower rate with high fees might cost more than slightly higher rate with low fees. Ask for Loan Estimate form (required within 3 days of application) showing all costs.
4. Choose the Right Loan Term
Shorter terms = lower rates:
15-year: Typically 0.5-0.75% lower than 30-year
20-year: Middle ground (~0.3% lower than 30-year)
10-year: Lowest rates but very high payment
5. Buy Discount Points (If Staying Long-Term)
You can pay upfront "points" to lower your rate. Each point costs 1% of loan amount and typically lowers rate by 0.25%.
Example: $300,000 loan, buying 2 points ($6,000) lowers rate from 6.5% to 6.0%, saving $33/month. Break-even: 182 months (15 years). If staying 15+ years, it's worth it!
6. Time Your Application
Mortgage rates fluctuate daily based on bond markets. Some timing tips:
Rates often better mid-week (Tuesday-Thursday)
Lock your rate when satisfied (30-60 day lock typical)
Shop during rate drops (monitor Freddie Mac weekly rates)
Economic uncertainty can lower rates (flight to safety)
Frequently Asked Questions
How much house can I afford?
The 28/36 rule is standard: Your monthly mortgage payment (PITI) shouldn't exceed 28% of your gross monthly income, and total debt payments shouldn't exceed 36%. Example: $100,000 annual income ($8,333/month) means max $2,333 mortgage payment. However, this is just a guideline - consider your actual budget, savings goals, and lifestyle.
What credit score do I need to buy a house?
Minimum scores vary by loan type: Conventional loans typically require 620+ credit score. FHA loans accept 580+ (500-579 requires 10% down). VA loans technically have no minimum, but most lenders want 620+. USDA loans want 640+. For best rates, aim for 760+ score.
Should I pay off my mortgage early?
It depends on your interest rate and alternative investments. If your mortgage is 6% and you can invest in stocks averaging 8-10% returns, investing is mathematically better. However, many people value the psychological benefit of being debt-free. Compromise: Pay extra toward principal when the market is down or after maxing out retirement accounts.
What is mortgage amortization?
Amortization is how your loan gets paid off over time. Each payment includes principal (loan paydown) and interest. Early on, most of your payment is interest. Gradually, more goes to principal. This is by design - the lender wants to collect interest while the balance is highest. Use our amortization schedule to see exactly how your loan pays down year by year.
What's the difference between fixed and adjustable rate mortgages?
Fixed-rate mortgages have the same interest rate for the entire loan term (30 years, 15 years, etc.). Your principal and interest payment never changes. Adjustable-rate mortgages (ARMs) have a fixed rate for an initial period (typically 5, 7, or 10 years), then adjust annually based on market rates. ARMs start with lower rates but carry risk of future increases.
How much should I save for a down payment?
Aim for 20% to avoid PMI, but many buyers succeed with less. First-time buyers average 6-7% down. Remember you also need closing costs (2-5% of purchase price) and emergency reserves (3-6 months expenses). Don't drain all savings for down payment - keep a safety net.
What are closing costs and how much are they?
Closing costs are fees to finalize your mortgage, typically 2-5% of purchase price. They include: Origination fee (0.5-1% of loan), appraisal ($400-800), title search and insurance ($1,000-2,000), credit report ($30-50), survey ($400-600), attorney fees (varies by state), prepaid property taxes and insurance, recording fees, and more. Ask for Loan Estimate upfront showing all costs.
Can I remove PMI after I reach 20% equity?
Yes! For conventional loans, once you reach 20% equity (through payments and appreciation), you can request PMI removal. Some lenders require a new appraisal ($400-600) to confirm your home's value. PMI automatically cancels at 22% equity (by law). For FHA loans made after June 2013, MIP (FHA's version of PMI) lasts the life of the loan unless you refinance.
How accurate is this mortgage calculator?
Very accurate for the inputs provided. We use the standard mortgage amortization formula used by all lenders: M = P[r(1+r)^n]/[(1+r)^n-1]. However, your actual payment may vary slightly due to: exact interest rate you qualify for, actual property tax and insurance costs, lender-specific fees, and escrow account management. Use this calculator for planning, then get official Loan Estimate from lenders for exact numbers.