Mortgage Calculator
Mortgage Calculator — Estimate Your Monthly Payment
Planning to buy a home? Use our free mortgage calculator to estimate your complete monthly payment including principal, interest, property taxes, homeowner insurance (PITI), PMI, and HOA fees. Enter your home price, down payment, interest rate, and loan term to see an instant breakdown of every cost.
How Mortgage Payments Are Calculated
A mortgage payment is calculated using the standard amortization formula: monthly payment = P x (r(1+r)^n) / ((1+r)^n – 1), where P is the loan principal, r is the monthly interest rate, and n is the total number of payments. For example, on a $400,000 loan at 6.81% over 30 years, the monthly P&I works out to approximately $2,618. On top of that you add property taxes (typically 1.1% annually), homeowner insurance (around $100/month), and PMI if your down payment is under 20%.
How Much House Can I Afford in 2026?
The standard rule is the 28/36 guideline: housing payment should not exceed 28% of gross monthly income, and total debts should not exceed 36%. In 2026, buyers earning $100,000 per year should target payments under $2,333/month. At a 7% rate with 10% down, that equates to a home price around $280,000 to $310,000. Use our home affordability calculator to find your number.
Fixed vs Adjustable Rate Mortgages
A fixed-rate mortgage locks your rate for the entire term, providing predictability. The 30-year fixed is the most popular product. An ARM offers a lower initial rate (fixed 5, 7, or 10 years), then adjusts annually. A 7/1 ARM at 5.5% vs a 30-year fixed at 6.81% saves about $350/month on a $400,000 loan during the fixed period. ARMs make sense if you plan to sell or refinance before the adjustment. For most 2026 buyers, the fixed rate offers better security.
How Down Payment Affects Your Monthly Payment
The down payment determines your loan size, PMI eligibility, and rate. On a $400,000 home at 6.81%, a 5% down payment results in a $380,000 loan plus PMI of about $158/month, totaling roughly $2,641/month. A 20% down payment drops the loan to $320,000 with no PMI: about $2,086/month, saving $555/month. Use the % toggle in the calculator above to compare scenarios instantly.
Understanding PMI and How to Avoid It
Private Mortgage Insurance is required on conventional loans when your down payment is under 20%. It costs 0.5% to 1.5% of the loan annually. On a $320,000 loan at 0.5%, that adds $133/month. PMI is removed when equity reaches 20%, and lenders must cancel it automatically at 78% LTV. Strategies to avoid PMI: 20% down payment, piggyback loan (80-10-10), or lender-paid PMI. The calculator auto-hides the PMI row when down payment reaches 20%.
Total Cost of Homeownership Beyond the Mortgage
True homeownership costs extend beyond the mortgage. Property taxes range from 0.3% (Hawaii) to over 2.0% (New Jersey). Insurance averages $1,200 to $2,000 per year but can be much higher in coastal areas. HOA fees add $200 to $500/month in many communities. Maintenance should be budgeted at 1% to 2% of home value annually. Our calculator includes property tax, insurance, PMI, and HOA so you get the most complete estimate possible.
Frequently Asked Questions
What is the monthly payment on a $300,000 mortgage?
At 6.81% on a 30-year term, the monthly P&I on a $300,000 mortgage is approximately $1,963. Adding 1.1% property tax adds about $275/month, and $100/month for insurance brings the PITI to roughly $2,338. PMI adds another $100-$150/month if down payment is under 20%.
How much do I need to put down on a home?
Conventional loans require at least 3% to 5% down. FHA loans require 3.5% with a 580+ credit score. Putting 20% down eliminates PMI. VA and USDA loans offer zero down payment for eligible borrowers.
What credit score do I need for a mortgage?
Most conventional lenders require a minimum of 620. FHA accepts 580 with 3.5% down. For the best rates in 2026, aim for 740 or higher. Even a 20-point score improvement can save thousands over the loan term.
Should I get a 15 or 30 year mortgage?
A 15-year mortgage saves 50-60% on total interest and builds equity faster, but payments are 30-40% higher. A 30-year offers lower payments and more flexibility. Choose 15 years if you can comfortably afford the higher payment; choose 30 years if you need cash flow flexibility.
What is included in a mortgage payment?
A full PITI payment includes Principal (reduces loan balance), Interest (cost of borrowing), Taxes (property taxes escrowed monthly), and Insurance (homeowner insurance escrowed). PMI is added if down payment is under 20%. HOA fees are paid separately to your association.
How do I calculate how much mortgage I can afford?
Multiply gross monthly income by 0.28 to find your max housing payment. Then use this calculator to find the home price that fits. At $8,000/month gross income, max payment is $2,240. At 6.81% over 30 years with 10% down, that supports roughly a $330,000 home price.
Start Calculating Your Mortgage Today
Use the calculator above to get an instant estimate. Adjust inputs until you find a payment that fits your budget, then review the amortization schedule to see how your balance decreases over time. Also explore our down payment calculator, PMI calculator, and mortgage refinance calculator.
Reviewed by Nathan Briggs, Real Estate Finance Writer. Updated April 2026.