Mortgage Calculator

Your monthly mortgage payment is calculated using the loan amount, interest rate, and loan term. The formula considers the principal (loan amount), the monthly interest rate, and the total number of payments. Additional costs like property tax and insurance are added to get your total monthly payment.

A 20% down payment is often recommended because it helps you avoid Private Mortgage Insurance (PMI), which typically costs 0.5-1% of the loan annually. However, many lenders accept down payments as low as 3-5%. A larger down payment means lower monthly payments and less interest over time.

15-year mortgage: Higher monthly payments, but you'll pay significantly less interest overall and build equity faster. Great if you can afford the payments.

30-year mortgage: Lower monthly payments, more flexibility in your budget, but you'll pay more interest over time. You can always make extra payments to pay it off faster.

The general rule is the 28/36 rule: your mortgage payment should be no more than 28% of your gross monthly income, and your total debt payments should be no more than 36%. This helps ensure you have enough money for other expenses and savings.

You can lower your monthly payment by: (1) Making a larger down payment, (2) Choosing a longer loan term, (3) Shopping for a lower interest rate, (4) Buying a less expensive home, (5) Improving your credit score before applying for a mortgage to qualify for better rates.