Free Mortgage Calculator

Your monthly mortgage payment typically consists of four components, often referred to as PITI: Principal, Interest, Taxes, and Insurance. Principal is the portion that reduces your loan balance, while interest is the cost your lender charges for borrowing money. In the early years of your mortgage, most of your payment goes toward interest, but over time the balance shifts and more goes toward principal.

Property taxes are assessed by your local government and typically range from 0.5% to 2.5% of your home's assessed value annually. Homeowner's insurance protects your property against damage and liability, and lenders require it for the life of the loan. If your down payment is less than 20%, most lenders also require Private Mortgage Insurance (PMI), which protects the lender — not you — if you default on the loan. PMI typically costs between 0.5% and 1.5% of the loan amount per year and can be removed once you reach 20% equity.

Understanding each component helps you budget accurately. Many first-time buyers focus only on the principal and interest amount and are surprised when taxes, insurance, and PMI add hundreds of dollars to their monthly obligation. Use the calculator above to see the full picture before you start house hunting.

Mortgage interest rates come in two primary types: fixed-rate and adjustable-rate (ARM). A fixed-rate mortgage locks in your interest rate for the entire loan term — typically 15 or 30 years — so your principal and interest payment never changes. An adjustable-rate mortgage starts with a lower introductory rate for a set period (commonly 5 or 7 years), then adjusts periodically based on a market index. ARMs can be attractive when rates are high, but they carry the risk of significantly higher payments in the future.

Even small differences in your interest rate have an enormous impact over the life of your loan. On a $300,000 mortgage, the difference between a 6.0% and a 6.5% rate is roughly $100 per month — and over 30 years, that adds up to more than $35,000 in additional interest. This is why shopping around and comparing rates from multiple lenders is one of the most valuable steps in the home buying process.

Your individual rate depends on several factors: your credit score (higher is better), your debt-to-income ratio (lower is better), your down payment size, the loan type and term, and current market conditions. Borrowers with credit scores above 760 typically qualify for the best available rates, while those below 620 may face rates that are 1–2 percentage points higher.

Your down payment is the cash you pay upfront when purchasing a home, and it directly affects your loan amount, monthly payment, interest rate, and whether you'll pay PMI. The traditional benchmark is 20% of the purchase price — on a $350,000 home, that's $70,000. Putting 20% down eliminates the need for private mortgage insurance and often qualifies you for a better interest rate.

However, many buyers don't have 20% saved. FHA loans allow as little as 3.5% down, and some conventional loan programs accept just 3%. VA loans and USDA loans may require no down payment at all for eligible borrowers. While a smaller down payment lets you buy sooner, it means a larger loan, higher monthly payments, and additional PMI costs that can range from $50 to $300 per month depending on the loan amount.

Many states and municipalities also offer down payment assistance programs for first-time buyers, including grants, forgivable loans, and matched savings plans. Research programs in your area — you may be eligible for help you didn't know existed. Our affordability calculator can help you see how different down payment amounts affect the price range you can comfortably afford.

The decision to rent or buy is one of the biggest financial choices you'll make, and the right answer depends on your personal circumstances. Key factors include how long you plan to stay (buying generally only makes sense if you'll stay at least 5–7 years), local market conditions (price-to-rent ratios vary dramatically by city), and your financial readiness (stable income, emergency fund, minimal debt).

The "break-even point" is the number of years it takes for owning to become cheaper than renting, once you account for all costs on both sides. Renting costs include monthly rent, renter's insurance, and potential rent increases. Buying costs include the mortgage payment, property taxes, insurance, maintenance (typically 1–2% of home value per year), HOA fees, and the opportunity cost of your down payment. Our Rent vs. Buy tab helps you calculate this break-even point for your specific situation.

Don't overlook the hidden costs of homeownership: a new roof can cost $10,000–$25,000, HVAC replacement runs $5,000–$15,000, and plumbing emergencies can set you back thousands. Renting provides predictability — your landlord covers major repairs. But buying builds equity over time and protects you from rising rents. There's no universally "right" answer; use the calculator to run the numbers for your specific scenario.

Improve your credit score. Your credit score is the single biggest factor lenders use to determine your rate. Pay all bills on time, reduce credit card balances below 30% of their limits, avoid opening new accounts before applying, and check your credit reports for errors. Even a 40-point improvement can save you 0.25–0.5% on your rate, translating to tens of thousands of dollars over the life of the loan.

Reduce your debt-to-income (DTI) ratio. Lenders typically want your total monthly debt payments (including the new mortgage) to stay below 43% of your gross income. Paying off car loans, student loans, or credit card debt before applying frees up borrowing capacity and may qualify you for a larger loan at a better rate. Even paying down smaller debts can significantly improve your DTI.

Save a larger down payment. Beyond avoiding PMI at 20%, a bigger down payment reduces your loan amount and monthly payment. Consider setting up an automatic savings transfer to a dedicated house fund. Other strategies include choosing a longer loan term (30 vs. 15 years) for lower monthly payments, considering less expensive neighborhoods or property types, and getting pre-approved to shop with confidence. Use our Affordability tab to see exactly how changes in income, debt, and down payment affect what you can afford.

Amortization is the process of spreading your loan repayment across equal monthly installments over the full loan term. Each payment is split between principal (reducing what you owe) and interest (the cost of borrowing). With a standard amortization schedule, the split changes every month: early payments are mostly interest, while later payments are mostly principal. On a 30-year, $280,000 loan at 6.5%, your first payment includes about $1,517 in interest and only $253 in principal. By year 20, this flips to roughly $700 in principal and $1,070 in interest.

This front-loading of interest is why extra payments early in the loan are so powerful. An additional $200 per month in the first year goes almost entirely toward principal, dramatically reducing the total interest you'll pay over the life of the loan. Even one extra payment per year — equivalent to paying biweekly instead of monthly — can shave 4–5 years off a 30-year mortgage and save tens of thousands in interest.

Click "Calculate" above and scroll down to view the full amortization schedule for your loan. The table shows how your balance decreases year by year, while the chart visualizes the principal-versus-interest split over time. You can also export the schedule as a CSV file for detailed planning in a spreadsheet.