Mortgage Calculator

Mortgage Calculator: Estimate Your Payments

Buying a home is likely the largest purchase you will ever make. Understanding the financial commitment is essential before signing any papers. Our Mortgage Calculator helps you estimate your monthly Principal and Interest (P&I) payments, allowing you to budget confidently for your new home.

The 4 Pillars of a Mortgage Payment

While this calculator focuses on the loan repayment, your actual monthly bill (often called PITI) usually includes four components:

Principal: The money that goes toward paying down the loan balance. In the early years, this portion is small.
Interest: The fee charged by the bank for lending you money. In the early years, this makes up the majority of your payment.
Taxes: Property taxes charged by your local government. These are often held in an escrow account by your lender.
Insurance: Homeowners insurance protects the property against fire, theft, and other disasters.

How Interest Rates Affect Buying Power

Even a small change in interest rates can dramatically affect how much house you can afford.

Scenario: $300,000 Loan (30-Year Fixed)

At 4.0% Interest:

$1,432 / mo

At 7.0% Interest:

$1,996 / mo

Impact: The 3% rate increase adds over $560 to the monthly payment, or over $200,000 in extra interest over the life of the loan.

15-Year vs. 30-Year Mortgages

30-Year Fixed

Lower monthly payments.
More flexibility in your monthly budget.
You pay significantly more interest over time.

15-Year Fixed

Higher monthly payments.
You own your home twice as fast.
Interest rate is often lower than 30-year loans.

Frequently Asked Questions

What is PMI?

Private Mortgage Insurance (PMI) is usually required if your down payment is less than 20% of the home's value. It protects the lender if you stop making payments. It typically costs 0.5% to 1% of the loan amount annually.

How much house can I afford?

A common rule is the 28/36 rule: Your housing expenses should not exceed 28% of your gross monthly income, and your total debt payments (including car loans, student loans, etc.) should not exceed 36%.