US Mortgage Calculator

Your monthly mortgage payment (principal + interest) is calculated using the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (loan term in years × 12). This calculator also adds property tax, home insurance, PMI, and HOA fees to show your true total monthly payment, often called PITI (Principal, Interest, Taxes, Insurance).

Conventional loans typically require 5–20% down. Putting down 20% or more lets you avoid Private Mortgage Insurance (PMI), which usually costs 0.5–1.5% of the loan amount annually. FHA loans allow as little as 3.5% down, while VA and USDA loans can require 0% down for eligible borrowers. A larger down payment reduces your loan amount, lowers your monthly payment, and reduces total interest paid over the life of the loan.

Private Mortgage Insurance (PMI) protects the lender if you default on a conventional loan with less than 20% down payment. PMI typically costs 0.5–1.5% of your loan amount per year, added to your monthly payment. Under the Homeowners Protection Act, lenders must automatically cancel PMI once your loan balance reaches 78% of the original home value, and you can request cancellation once it reaches 80%, provided you have a good payment history.

A 15-year mortgage has a higher monthly payment but a lower interest rate and dramatically less total interest paid — often saving tens of thousands of dollars. A 30-year mortgage has a lower monthly payment, making homes more affordable month-to-month, but costs significantly more in total interest over the life of the loan. The right choice depends on your monthly budget, financial goals, and whether you'd rather invest the payment difference elsewhere.

Extra payments go directly toward your principal balance, which reduces the amount of interest that accrues in future months. Because mortgage interest compounds on the remaining balance, even small extra payments — like an additional $100 to $500 per month — can shorten your loan term by years and save tens of thousands of dollars in interest, since you are paying down the principal faster than the original amortization schedule requires.

Most lenders and financial advisors recommend the 28/36 rule: your total housing costs (mortgage, taxes, insurance, HOA) should not exceed 28% of your gross monthly income, and your total debt payments (including the mortgage) should not exceed 36% of gross monthly income. Some lenders allow higher ratios depending on credit score, down payment, and loan type, but staying within these guidelines reduces financial strain.

The true cost of homeownership extends beyond principal and interest. Recurring monthly costs include property tax, homeowners insurance, PMI (if applicable), and HOA fees. Ongoing costs also include maintenance and repairs (commonly estimated at 1% of home value per year), utilities, and one-time closing costs (typically 2–5% of the loan amount) paid at purchase, covering items like loan origination fees, appraisal, title insurance, and escrow setup.

Whether to buy now or wait depends on interest rate trends, home price appreciation in your area, your savings for a down payment, and your personal readiness (job stability, credit score, debt levels). Waiting can mean a larger down payment and potentially better rates, but also risks rising home prices and rent paid in the meantime that builds no equity. Use the "Buy Now vs Wait" comparison in this calculator to model both scenarios with your own assumptions about rate and price changes.