How to estimate your mortgage payment
- Enter the home price, your down payment as a percentage and the interest rate.
- Pick a loan term β 30 and 15 years are the most common.
- Add property tax, insurance and HOA fees to see the full monthly cost.
The full monthly cost
Your housing payment is more than principal and interest. Property tax, homeowners insurance, mortgage insurance and HOA fees can add hundreds a month.
How rate and term change the cost
On a $300,000 loan, each extra percentage point of interest adds roughly $180β200 a month on a 30-year term. A 15-year loan costs more each month but saves a large share of the total interest.
Affordability
A common guideline is to keep housing costs below about 28% of gross monthly income and all debt payments below 36%.
Frequently asked questions
What is included in a mortgage payment?
Usually principal and interest plus property tax and homeowners insurance (PITI), held in escrow by the lender. PMI and HOA fees are added when they apply.
How much should I put down?
20% avoids PMI on a conventional loan. Many buyers put down less β FHA loans allow 3.5% β but then pay mortgage insurance.
15-year or 30-year mortgage?
A 15-year loan has a higher monthly payment but a lower rate and far less total interest. A 30-year loan keeps the payment lower.
How is the monthly payment calculated?
Principal and interest use the standard amortization formula: P Γ r Γ· (1 β (1 + r)^βn), where r is the monthly rate and n the number of payments.