Mortgage Payment Calculator

Rule of thumb for the full payment

If you want a quick estimate of your real total monthly housing cost, take the principal & interest from this calculator and add roughly 1/12 of 1.5% of your home price for taxes and insurance combined. For a $400,000 home, that's about $500/month on top of P&I. In high-tax states (New Jersey, Illinois, Texas, New Hampshire) you may need 2% or more; in low-tax states (Alabama, Louisiana, Hawaii), as little as 0.7%.

If you're putting less than 20% down, add PMI as well — usually $30–$70 per month per $100,000 borrowed. And don't forget HOA fees if your home is in a community with them; these are billed separately, not through escrow.

For a fixed-rate mortgage, the monthly principal-and-interest payment uses this standard amortization formula:

Where:

• M = monthly principal & interest payment
• P = loan amount (principal)
• r = monthly interest rate (annual rate ÷ 12, expressed as a decimal — so 6% becomes 0.06/12 = 0.005)
• n = total number of payments (loan term in years × 12)

A 30-year loan has 360 payments; a 15-year loan has 180. Early payments are mostly interest. As the loan balance falls, more of each payment goes to principal — this is called amortization. By the final year of a 30-year loan, almost every dollar of your payment goes to principal.

It's tempting to look at a $1,800 rent payment, run the calculator and see a $1,750 mortgage on a comparable home, and conclude that buying is cheaper. It almost never is, in the short term. A fair rent-vs-buy comparison adds the costs renting doesn't have:

• Property taxes — often $300–$1,000+/month depending on state
• Homeowners insurance — typically $100–$200/month
• PMI if you put less than 20% down — $50–$300/month
• Maintenance — budget at least 1% of home value per year ($333/month on a $400,000 home)
• HOA fees if applicable — often $200–$600/month for condos or planned communities
• Closing costs — 2%–5% of the purchase price, paid upfront
• Opportunity cost — what your down payment could have earned invested elsewhere

On the other side of the ledger, buying gives you equity (each principal payment builds your stake), tax deductions on mortgage interest and property tax (if you itemize), price stability (rent rises every year; a fixed mortgage doesn't), and the option to make money if home values rise.

The honest answer: buying typically becomes cheaper than renting somewhere between 5 and 10 years of ownership in most markets, longer in expensive coastal cities. If you'd move sooner than that, renting is usually the better financial move — even when the monthly mortgage payment looks lower.

How much house can I afford?

A common rule of thumb: total housing costs (PITI) should stay under 28% of your gross monthly income, and total monthly debt payments — including the mortgage — should stay under 36%. Lenders typically allow a debt-to-income ratio up to 43% for conventional loans (and up to 50% for FHA), but just because you can borrow that much doesn't mean you should. The 28/36 rule leaves room for savings, emergencies, and the things that make life worth living.

What credit score do I need for a mortgage?

Minimums vary by program: 620+ for conventional, 580+ for FHA at 3.5% down (or 500+ with 10% down), and roughly 580–620 for VA and USDA depending on the lender. The best mortgage rates are reserved for scores of 740 or higher, with another small step up at 760. Mortgage lenders use older FICO models (FICO 2, 4, and 5) that often score 10–40 points lower than the FICO 8 you see in your credit-card app, so check your real mortgage score before applying. See Understanding Your Credit Score for details.

Should I get a 15-year or 30-year mortgage?

The 30-year keeps payments lower and gives you flexibility — you can always pay extra toward principal voluntarily. The 15-year forces discipline, typically offers a lower interest rate (often 0.5%–1% less), and builds equity faster, but the monthly payment runs 40–50% higher. A common middle path: take the 30-year for the lower required payment, then make one extra principal payment per year on your own. You'll pay it off in roughly 22–24 years and save a small fortune in interest.

What is a conforming loan limit, and why does it matter?

The conforming loan limit is the maximum loan amount Fannie Mae and Freddie Mac will buy from lenders. For 2026, the baseline limit is $832,750 in most U.S. counties, rising to $1,249,125 in designated high-cost areas (parts of California, New York, New Jersey, Hawaii, and others). Loans above the limit are called jumbo loans — they usually require better credit (often 700+), larger down payments (10%–20%+), and may carry slightly higher interest rates. Check the FHFA's official county-by-county map if you're shopping near the cutoff.

When can I drop PMI?

For conventional loans with PMI, federal law (the Homeowners Protection Act) gives you two automatic protections: PMI must be terminated automatically when your loan balance hits 78% of the original home value (assuming you're current on payments), and you can request cancellation at 80%. You can speed this up by making extra principal payments, or by getting a new appraisal if your home value has risen. FHA mortgage insurance is different — on most current FHA loans, the insurance lasts the life of the loan, and the only way out is to refinance into a conventional loan once you have 20% equity.

Should I rent or buy?

Buying tends to win financially over 5–10+ years of ownership, but is usually a losing trade if you'd move sooner because of closing costs, transaction fees, and slow equity build-up in the early years. Rent vs. buy is also a lifestyle question: buying ties you to a location and to maintenance work; renting offers flexibility but means rising rent and no equity. Use the calculator above with your real numbers (including property tax and maintenance estimates), and be honest about how long you'll stay.