Smart Homebuying Tips
The 20% Down Payment Rule
Put down at least 20% to avoid PMI (private mortgage insurance). PMI can add $100-200 to your monthly payment and doesn't build equity - it just protects the lender.
Don't Forget the Extra Costs
Your mortgage payment isn't everything. Budget for property tax, homeowner's insurance, HOA fees, maintenance, and repairs. A good rule is to save 1-2% of your home's value yearly for upkeep.
Get Multiple Rate Quotes
Even a quarter-point difference in your interest rate can save you tens of thousands over the life of your loan. Shop around with at least three lenders.
15-Year vs 30-Year Mortgages
15-year loans have higher monthly payments but way less total interest. 30-year loans are easier on your monthly budget but cost more long-term. Run the numbers for both.
The 28/36 Rule
Lenders typically want your mortgage payment under 28% of your gross income, and total debt under 36%. Just because you qualify doesn't mean you should max it out.
Extra Payments Make a Difference
Even one extra payment per year can shave years off your mortgage and save thousands in interest. Many people make bi-weekly payments instead of monthly to achieve this.
Everything You Need to Know About Mortgage Calculators
How This Mortgage Payment Calculator Works
Our mortgage calculator uses standard formulas that lenders use to figure out your monthly payment. It takes your home price, down payment, interest rate, and loan term to calculate principal and interest. Then it adds in property taxes, homeowner's insurance, PMI (if you put down less than 20%), and any HOA fees to give you the real monthly cost of homeownership.
Understanding Mortgage Payments (PITI)
Your mortgage payment actually has four parts - that's why lenders call it PITI. Principal is the amount you borrowed that's going toward paying down the loan. Interest is what the bank charges you to borrow the money. Taxes are your local property taxes (usually paid into an escrow account). Insurance is your homeowner's insurance policy. Some people also have PMI and HOA fees on top of all that.
What Is a Simple Mortgage Calculator?
A simple mortgage calculator focuses on just the basics - home price, down payment, interest rate, and loan term. It gives you the principal and interest payment without all the extra stuff like taxes and insurance. That's fine for a quick estimate, but our full calculator is better because it shows you the real monthly cost including everything you'll actually pay.
Mortgage Rate Calculator - How Rates Affect Your Payment
Your interest rate makes a huge difference. On a $300,000 loan, the difference between 6% and 7% is about $200 per month - that's $2,400 per year or $72,000 over a 30-year mortgage. This is why shopping around for the best rate matters so much. Even a quarter-point can save you thousands.
Using a Mortgage Payoff Calculator
Want to pay off your mortgage early? Small changes make a big impact. Making one extra payment per year on a 30-year mortgage can cut 4-5 years off your loan and save tens of thousands in interest. Our calculator shows you the standard payoff date, but you can always pay extra toward principal to finish sooner.
Understanding PMI (Private Mortgage Insurance)
If you put down less than 20%, most lenders require PMI. This typically costs 0.5% to 1% of your loan amount per year, divided into monthly payments. On a $240,000 loan, that's $100-200 per month. The good news? Once you reach 20% equity (either through payments or home appreciation), you can usually drop PMI.
Fixed Rate vs Adjustable Rate Mortgages
Most people get fixed-rate mortgages where your interest rate never changes. Adjustable-rate mortgages (ARMs) start with a lower rate that can change after a few years. ARMs can save money if you're planning to move soon, but they're riskier if you're staying long-term because your payment could go up significantly.
How Much House Can You Actually Afford?
Just because you qualify for a certain loan amount doesn't mean you should borrow that much. A common guideline is that your monthly housing costs (PITI) shouldn't exceed 28% of your gross monthly income. And your total debt payments (including car loans, student loans, credit cards, and mortgage) shouldn't top 36% of your income. Leave yourself breathing room for emergencies and other goals.
What Affects Your Mortgage Interest Rate
Your credit score is huge - the difference between a 680 and 760 credit score can be half a percentage point or more. Your down payment matters too - bigger down payments often get better rates. The loan type (conventional, FHA, VA) affects rates, as do current market conditions and whether you're buying a primary residence, second home, or investment property.