Mortgage Calculator: What Will Your Payment Actually Be?
The mortgage calculator shows your monthly payment broken down into principal, interest, taxes, and insurance — and a full amortization schedule so you see exactly where every dollar goes.
Use the Calculator
What to enter:
- Home price
- Down payment (dollar amount or percentage)
- Loan term (15 or 30 years)
- Annual interest rate (current 30yr rate: 6.30%)
- Annual property tax rate
- Annual homeowner's insurance estimate
What you get:
- Monthly PITI payment (Principal + Interest + Taxes + Insurance)
- Total interest paid over the loan's life
- Break-even point for buying vs. renting
- Year-by-year amortization table
The Four Components of a Mortgage Payment (PITI)
When people ask "what's the mortgage payment," they usually mean the full PITI:
Principal — The portion of your payment that reduces your loan balance. Small in early years, grows over time.
Interest — The cost of borrowing. Large in early years, shrinks as the balance decreases.
Taxes — Property taxes collected by the lender monthly and held in escrow, then paid to the local government annually. Typically 0.5%–2.5% of home value per year depending on your state.
Insurance — Homeowner's insurance (hazard insurance) is required by all lenders. If your down payment is less than 20%, you'll also pay PMI (Private Mortgage Insurance), adding $50–$200/month until you reach 20% equity.
Current Mortgage Rates (2026)
| Loan Type | Average Rate |
|---|---|
| 30-year fixed | 6.30% |
| 15-year fixed | 5.80% |
| 5/1 ARM | 5.95% |
| FHA 30-year | 6.10% |
| VA 30-year | 5.85% |
Rates change daily. Always get personalized quotes from at least 3 lenders.
How Much House Can You Afford?
The standard rule is the 28/36 rule:
- Your monthly housing payment (PITI) should not exceed 28% of your gross monthly income
- Your total monthly debt payments (housing + car + student loans + credit cards) should not exceed 36%
Example
Monthly gross income: $8,000
- Maximum housing payment: 28% × $8,000 = $2,240
- Maximum total debt: 36% × $8,000 = $2,880
If you have $500/month in other debts, your maximum housing payment would be capped at $2,880 − $500 = $2,380.
The Impact of Down Payment
Your down payment size affects your loan in three ways: loan balance, monthly payment, and whether you pay PMI.
| Home Price: $400,000 | Down Payment | Loan Amount | Monthly P&I | PMI? |
|---|---|---|---|---|
| 3% down | $12,000 | $388,000 | $2,404 | Yes (~$160/mo) |
| 10% down | $40,000 | $360,000 | $2,231 | Yes (~$120/mo) |
| 20% down | $80,000 | $320,000 | $1,983 | No |
| 25% down | $100,000 | $300,000 | $1,858 | No |
Based on 6.30% for 30 years. Does not include taxes/insurance.
15-Year vs. 30-Year Mortgage
The choice between a 15-year and 30-year mortgage involves a fundamental tradeoff between monthly cash flow and total interest cost.
| $350,000 loan at 6.30% | 30-Year | 15-Year |
|---|---|---|
| Monthly payment | $2,170 | $3,018 |
| Total interest paid | $430,900 | $193,200 |
| Interest saved | — | $237,700 |
| Monthly cost difference | — | +$848 |
The 15-year saves $237,700 in interest but costs $848 more per month. If you invest that $848/month difference at 7% return, you'd have ~$287,000 after 15 years — more than the interest savings. This is why many financial planners recommend the 30-year if you'll actually invest the difference.
How to Get the Best Mortgage Rate
1. Improve your credit score The single biggest lever. A 760+ score vs. 680 can mean a 0.5–1.0% lower rate — worth $50,000–$100,000 on a $400K home over 30 years.
2. Shop multiple lenders Get quotes from at least 3 lenders: your bank, a credit union, and an online lender (like Rocket Mortgage or Better). Studies show borrowers who shop save an average of $1,500 over the loan's life.
3. Consider points Paying "discount points" (1 point = 1% of the loan) upfront lowers your rate. One point on a $400K loan costs $4,000 but might reduce your rate by 0.25%, saving $55/month. Break-even: 73 months (~6 years).
4. Lock your rate Once you're in contract, lock your rate immediately. Rate locks typically last 30–60 days. Rates can move meaningfully in even a week.
5. Time your application Mortgage rates tend to be lower when economic data is weak or when the Fed signals rate cuts. Rates in early 2026 are elevated — refinancing may be advantageous if rates fall below 5.5%.
Refinancing: When Does It Make Sense?
The classic rule: refinance if you can lower your rate by 1% or more and plan to stay in the home long enough to recoup closing costs (typically $3,000–$6,000).
Break-even formula: Break-even months = Closing costs ÷ Monthly savings
Example: $5,000 in closing costs, $200/month in savings → break-even at 25 months. If you plan to stay 5+ years, refinancing makes sense.
Frequently Asked Questions
What is PMI and how do I get rid of it? PMI (Private Mortgage Insurance) protects the lender if you default. It's required when you put less than 20% down. Once you reach 20% equity (either through payments or appreciation), you can request PMI cancellation. Lenders are legally required to auto-cancel at 22% equity.
What's the difference between pre-qualification and pre-approval? Pre-qualification is a soft estimate based on self-reported income/assets. Pre-approval involves the lender verifying your documents. Pre-approval carries much more weight with sellers.
How much are closing costs? Typically 2%–5% of the loan amount. On a $400,000 home, expect $8,000–$20,000 in closing costs including origination fees, appraisal, title insurance, and prepaid taxes/insurance.
Should I pay extra toward my mortgage principal? Mathematically, it depends on your mortgage rate vs. expected investment returns. If your mortgage is 6.30% and you expect 7–10% stock market returns long-term, investing likely beats prepaying. But debt-free peace of mind has real psychological value too.