Mortgage Calculator

The short answer

• On a $400,000 home with 10% down at 7.25% over 30 years, principal and interest is $2,456 a month.
• Add 1% property tax, $1,800 a year of insurance and 0.5% PMI and the first payment is $3,089.
• Over 30 years you would pay $524,100 in interest, more than the $360,000 you borrowed.
• Paying $200 extra a month saves $130,583 of interest and clears the loan 6 years 4 months sooner.

What goes into the payment

Lenders call the monthly payment PITI: principal, interest, taxes and insurance. Principal repays what you borrowed. Interest is the lender’s charge for the loan. Taxes and insurance are usually collected by your servicer each month and paid for you from an escrow account.

Two more costs often sit on top:

• Private mortgage insurance (PMI), on a conventional loan with less than 20% down. It protects the lender, not you.
• HOA dues, if the home is in a homeowners association. You usually pay these to the association directly, but lenders count them when deciding what you can afford.

The calculator shows each part separately, so you can see which costs are fixed for the life of the loan (principal and interest on a fixed-rate mortgage) and which can rise (tax, insurance and dues).

A worked example

Here is a typical first-time purchase, using the calculator’s default figures.

PMI drops off automatically after 9 years 10 months, when the scheduled balance reaches 78% of the price. From then on the payment is $2,939, if tax and insurance have not changed. If the home had an HOA charging $250 a month, the payment would be $3,339.

How the payment is worked out

A fixed-rate mortgage uses the standard loan formula. With a monthly rate r (the yearly rate ÷ 12), n monthly payments and a loan P:

Payment = P × r ÷ (1 − (1 + r)⁻ⁿ)

At 7.25%, r is 0.6042% a month, and a 30-year loan has 360 payments. The formula sets one payment that clears the loan exactly on time. Interest each month is the balance times r; whatever is left of the payment reduces the balance. The same formula drives our loan calculator for car and personal loans.

Where each payment goes

Early payments are mostly interest, because the balance is at its largest. In the example, the first payment of $2,456 is $2,175 interest and only $280.83 principal. Principal does not overtake interest until payment 246, more than 20 years in.

In year one you pay $25,986 of interest and only $3,484of principal. This is why selling or refinancing in the first few years leaves you with little equity beyond your down payment and any rise in the home’s value.

How much the rate matters

Small differences in the rate change both the payment and the lifetime interest a lot. On a $360,000 loan over 30 years:

Each half point is worth about $120 a month on this loan, and over $40,000 of interest over 30 years. Shopping around with three or more lenders and comparing Loan Estimates on the same day is one of the cheapest ways to save.

Mortgage rates in 2026

Freddie Mac’s Primary Mortgage Market Survey put the average 30-year fixed rate at about 7.3% on October 1, 2026, up from about 6.3% a year earlier. The 15-year average was about 6.6%. These are averages for borrowers with strong credit and around 20% down; your rate depends on your credit score, down payment, loan type and whether you pay points.

15, 20 or 30 years

A shorter loan costs more each month but far less overall, and 15-year loans usually come with a lower rate too.

The 15-year loan costs $700 more a month than the 30-year but saves about $316,000 of interest. A middle path is to take the 30-year loan for its lower required payment and pay extra when you can, which keeps flexibility if money gets tight.

How big a down payment

You do not need 20% down. Many conventional loans accept 3% to 5%, and FHA loans 3.5%. But a bigger down payment shrinks the loan, the payment and PMI.

Going from 10% to 20% down saves $423 a month at the start. Keep enough cash for closing costs, moving and an emergency fund, though: an empty savings account the day you get the keys is a risk of its own. Our home affordability calculator shows how the down payment changes the price you can buy at.

PMI and how to get rid of it

PMI is charged on conventional loans when the loan is more than 80% of the home’s value. Freddie Mac puts the usual cost at about $30 to $70 a month for every $100,000 borrowed, roughly 0.35% to 0.85% of the loan a year. Better credit and a bigger down payment push it toward the low end.

Under the Homeowners Protection Act, as the CFPB explains, PMI on most conventional loans made since 1999 stops in one of three ways:

• You ask once the balance reaches 80% of the original value (the lower of the price or appraisal). You need a good payment record and the lender may want proof the value has not fallen.
• It ends automatically when the original schedule reaches 78%, if you are up to date.
• It must end at the loan’s midpoint, year 15 on a 30-year loan, even if neither has happened.

In the example, you could ask to cancel after 8 years 8 months; with $200 a month extra, after 5 years 8 months. Extra payments do not move the automatic 78% date, which follows the original schedule, so put the request in writing.

Property tax

Property tax is set by your county, city and school district, as a share of the assessed value. Census Bureau figures for 2024 put the typical bill at about 0.89% of a home’s value nationally ($3,211 on a $360,600 home). Statewide, it runs from about 0.27% in Hawaii to about 1.9% in New Jersey and Illinois. Pick your state in the calculator and it fills in that state’s typical rate.

The tax is often reassessed after a sale, so the seller’s bill can understate yours. Check the county assessor’s site, and ask about homestead exemptions, which lower the taxable value of a main home in many states.

Homeowners insurance

Lenders require homeowners insurance that covers the cost of rebuilding. Premiums depend heavily on location: areas exposed to hurricanes, hail or wildfire cost far more, and premiums in those areas have risen quickly in recent years. Flood damage is not covered by a standard policy; in a flood zone your lender will require separate flood insurance.

Get a real quote before you make an offer, and enter it in the calculator. A few hundred dollars a year can change what you can afford.

HOA dues

Condos, townhomes and many newer subdivisions charge HOA dues for shared upkeep, amenities and sometimes some utilities or insurance. Lenders count them in your debt-to-income ratio. Ask for the association’s budget and reserve study: a thin reserve fund can mean a special assessment, a one-off bill to owners, later on.

Escrow and why payments change

Your servicer collects one-twelfth of the yearly tax and insurance bills each month and pays them when due. Once a year it runs an escrow analysis. If the bills went up, your payment rises and you may be asked to make up a shortage; if they went down, you may get a refund of the surplus.

So even on a fixed-rate loan, your total payment usually creeps up over time. Only the principal and interest part is truly fixed.

Paying extra principal

Every extra dollar goes straight to principal, which cuts the interest charged in every month that follows. On the $360,000 example loan:

Before paying extra, check that you have an emergency fund, that higher-rate debts such as credit cards are cleared, and that you are getting any employer 401(k) match. Money in your home is hard to get back without selling or borrowing.

Conventional, FHA, VA and USDA

• Conventional loans follow Fannie Mae and Freddie Mac rules. PMI applies below 20% down and can be cancelled.
• FHA loans allow 3.5% down with lower credit scores, but charge an upfront and an annual mortgage insurance premium instead of PMI, often for the life of the loan.
• VA loans, for eligible service members and veterans, need no down payment and no monthly mortgage insurance, but most borrowers pay a one-time funding fee.
• USDA loans cover eligible rural areas with no down payment and an annual guarantee fee.

For FHA, VA or USDA loans, enter their yearly fee as the PMI rate to get a close estimate.

Cash you need at closing

On top of the down payment you pay closing costs: lender fees, appraisal, title insurance, recording and transfer taxes, plus prepaid interest and the first deposits into escrow. These often come to several thousand dollars and can be negotiated in part, for example as a seller credit. Your Loan Estimate lists them; the CFPB’s closing cost guide explains each line.

Interest rate vs APR

The interest rate sets your payment. The APR adds lender fees and points, spread over the loan, so it is higher. Use the APR to compare offers with different fees, and the rate to work out the payment. Points are prepaid interest: one point costs 1% of the loan and usually lowers the rate a little. Points pay off only if you keep the loan long enough, and many people refinance or move first. Our refinance calculator uses the same break-even logic.

Common mistakes

• Budgeting on principal and interest only, then finding the escrow payment is hundreds more.
• Using the seller’s old property tax bill instead of the tax after reassessment.
• Forgetting that PMI does not cancel itself at 80%: you have to ask.
• Stretching to the lender’s maximum and leaving no room for repairs (a common rule of thumb is to set aside about 1% of the home’s value a year).
• Comparing offers on rate alone instead of the APR and the fees on the Loan Estimate.

Using the calculator well

1. Enter the price and down payment, as dollars or a percent.
2. Use a real rate quote and pick the term.
3. Under More options, enter the property tax (as a rate or a dollar figure), an insurance quote, HOA dues and your PMI rate.
4. Try an extra monthly payment to see the interest saved and the new payoff date.
5. Copy the link to share the exact figures with a partner or loan officer.

Renting for now? Our rent affordability calculator shows what rent fits your income, and the debt-to-income calculator shows your ratios as a lender sees them.

Biweekly payments

Some lenders and services offer biweekly payments: half the monthly payment every two weeks. Because a year has 52 weeks, that makes 26 half-payments, or 13 full payments instead of 12. The effect is the same as adding one-twelfth of a payment each month.

On the example loan, one-twelfth of the $2,456 payment is about $205. Adding that each month pays the loan off in 283 months, 6 years 5 months early, and saves $132,742 of interest. You can get the same result yourself with an extra monthly payment, without paying a fee to a third-party biweekly service.

Key numbers