Mortgage Calculator

Use this mortgage calculator to estimate your monthly payments and find out what you can afford. Buying a house is the largest investment of a lifetime, and preparation is key: play with the purchase price, down payment and interest rate to see how each one changes your payment.

Knowing your numbers before you shop puts you ahead of the competition. You can talk to lenders, understand the figures they quote, and decide what you are comfortable paying each month.

A mortgage is not just an interest rate — it is a commitment of up to 30 years. The calculator shows the big picture: taxes, insurance, PMI and HOA fees included, so there are no surprises after closing.

F.A.Q.

What is a mortgage?

A mortgage is a loan you take out to buy a home. Lenders base your eligibility on your credit score, current debts, money saved, and the home’s value. The difference from a standard loan, besides the amount, is the collateral: the lender uses your house as security. If you default on your payments (usually for more than 90 days), the lender can foreclose, sell the home, and recover the money you did not pay back.

What is mortgage insurance?

Mortgage insurance protects the lender in case you default, even though you are the one paying it. Conventional loans require it if you put down less than 20% of the purchase price — and you can cancel it once you pay your balance down to 80% of the home’s value.

Government loans, including FHA and USDA, charge mortgage insurance for the life of the loan, but at a lower rate than conventional loans. Mortgage insurance is what makes a loan possible when you do not have perfect credit or a large down payment.

How is a mortgage payment calculated?

Your mortgage payment includes principal, interest, mortgage insurance, real estate taxes, and homeowner’s insurance. The principal is the amount you borrow; the interest is the lender’s fee. Divide the quoted annual rate by 12 to get your monthly rate, then multiply it by the outstanding balance to get the interest portion of a payment.

The full monthly payment is the principal portion plus the monthly interest, 1/12 of the annual real estate taxes, 1/12 of the home insurance, and mortgage insurance if it applies.

How much mortgage can I afford?

Lenders decide how much you can borrow based on your income, credit score, and current debts. Every situation is different, but in general lenders allow a debt-to-income ratio of up to 43–50%: your mortgage payment (principal, interest, taxes and insurance) plus existing debts — credit cards, car loans, personal loans — should not exceed 43–50% of your gross monthly income.

Definitions

Mortgage

The loan you borrow to buy a home. It includes principal, interest, and required mortgage insurance; many lenders also collect real estate taxes and home insurance with the payment. The mortgage plus your down payment make up the purchase price.

Mortgage calculator

A tool that estimates your monthly payment and shows how much house you can afford. Use it before you shop for a home or before you refinance, and see how each factor changes the payment.

Purchase price

The price you and the seller finally agree on — the number written in your sales contract. Lenders use it as the baseline when determining your mortgage amount.

Down payment

The money you invest in the home upfront, as a percentage of the purchase price. You will need at least 3.5%, often more. On a $100,000 home, a 3.5% down payment is $3,500 and a 20% down payment is $20,000.

Interest rate

The fee the lender charges monthly until the loan is paid in full. Rates are quoted annually; divide by 12 for the monthly rate. As the balance goes down, you pay less interest each month. You can check mortgage rates by state on our website.

Mortgage term

The time you have to pay the loan back. Most borrowers choose a 30-year (360-month) term, but 10, 15 and 20-year terms are common — the shorter the term, the lower the rate lenders charge.

Start date

The date of your first payment — not the day you close. Mortgage interest is paid in arrears, so the first payment comes the second month after closing: close on January 15 and your first payment is due March 1.

Property tax

Every US county charges property tax as a percentage of the home’s assessed value; the county assessor’s website lists the exact amount. Most lenders collect it monthly with the mortgage payment to make sure it gets paid.

Property insurance

Homeowner’s insurance required by lenders. It protects you from financial loss — and protects the lender, who would otherwise lose everything if the home burned down and could not be rebuilt.

PMI

Private Mortgage Insurance applies to conventional loans with a down payment under 20%. You pay it until you owe less than 80% of the home’s value — the calculator shows the exact month that happens. If you default for over 90 days, the lender claims the insurance, forecloses, and recovers part of its loss.