How much house can I afford?

The standard guideline is that your total housing payment (PITI — principal, interest, taxes, insurance) should not exceed 28% of your gross monthly income. With a $90,000 salary ($7,500/month), that's a maximum PITI of $2,100. Use our mortgage calculator to find the loan amount that produces this payment at current rates.

How do I calculate my mortgage payment by hand?

The monthly payment formula is M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (years × 12). For a $320,000 loan at 7% over 30 years: r = 0.005833, n = 360, giving a payment of about $2,129. This covers principal and interest only — add property taxes, homeowners insurance, and any PMI or HOA fees to get your full monthly housing cost.

What is a reverse mortgage and how does it work?

A reverse mortgage (most commonly an FHA-insured HECM) lets homeowners aged 62+ convert home equity into cash — as a lump sum, monthly payments, or a line of credit — without selling or making monthly loan payments. Interest accrues onto the balance, and the loan is repaid when the owner sells, moves out, or passes away. Borrowers remain responsible for property taxes, insurance, and upkeep. It can help cash-poor, equity-rich retirees, but fees are high and heirs inherit less equity, so compare alternatives first.

How much does it cost to refinance a mortgage?

Refinancing typically costs 2%–6% of the loan balance in closing costs — appraisal, origination, title, and recording fees. On a $300,000 balance that is $6,000–$18,000. To decide if it is worth it, divide the total cost by your monthly savings to find the break-even point: if refinancing costs $6,000 and saves $200/month, you break even in 30 months. Refinancing generally makes sense if you will keep the loan well past break-even and can lower your rate meaningfully.

What is PMI and how do I avoid it?

Private Mortgage Insurance (PMI) is required by lenders when your down payment is less than 20%. It typically costs 0.5–1% of the loan amount annually. You can avoid PMI by: putting 20%+ down, using a piggyback loan (80/10/10), or getting an FHA loan (which has MIP instead). PMI is cancelled automatically when your equity reaches 20% on conventional loans.

Is a 15-year or 30-year mortgage better?

A 15-year mortgage pays off faster and saves dramatically on interest (often $100,000–200,000+ on a typical loan) but has a monthly payment 40–60% higher than a 30-year. Choose 15-year if you can comfortably afford the payment and value being debt-free sooner. Choose 30-year if you need flexibility or want to invest the payment difference elsewhere.

What is an amortization schedule?

An amortization schedule lists every mortgage payment for the life of the loan, showing how much goes to principal vs. interest each month. Early payments are mostly interest (e.g., month 1 of a $300,000 30-year loan at 7% applies $1,750 to interest and only $146 to principal). The balance gradually shifts over time.

Does this mortgage calculator include taxes, insurance, PMI and HOA?

Yes. Enter monthly property tax and insurance directly, and open Advanced options for down payment, HOA dues, and PMI. The results show both your principal-and-interest payment and your total monthly payment, and the donut chart breaks down where every dollar goes.

Mortgage Calculator

Finance

Complete mortgage analysis with amortization

Currency

Home Price

Interest Rate (%)

Loan Term (Years)

Monthly Property Tax

Monthly Insurance

Advanced options▾

Down Payment(optional — subtracted from home price)

Monthly HOA Fees

Monthly PMI(private mortgage insurance, if any)

Buying a home is the largest financial commitment most people make in their lifetime — and yet most buyers know only their monthly payment, not the total cost. That $350,000 home with a 7% mortgage over 30 years? You'll actually pay $836,688 total — $486,688 of which is interest. More than the home itself.

Our free mortgage calculator gives you the complete financial picture: monthly principal and interest, total cost over the loan term, total interest paid, and a full month-by-month amortization schedule showing exactly how each payment is divided. Change the down payment, interest rate, or term and all figures update instantly for side-by-side comparison.

Whether you're pre-qualifying, comparing lenders, or deciding between a 15-year and 30-year loan, this tool gives you the data to make an informed decision.

Why Mortgage Calculator Matters

The mortgage market in the US is enormous — Americans owe over $12 trillion in mortgage debt. The difference between a well-chosen mortgage and a poor one can easily amount to $50,000–$200,000 over the life of a loan. A 0.5% lower interest rate on a $400,000 30-year mortgage saves $42,180 in total interest. Choosing a 15-year over 30-year term saves $180,000+ in interest (but increases monthly payment by $600–900). These numbers only become visible when you calculate them.

The Mortgage Calculator Formula, Explained

M = P[r(1+r)^n] / [(1+r)^n – 1] + (Property Tax + Insurance) / 12

Core payment (Principal + Interest): M = P × [r(1+r)^n] / [(1+r)^n – 1] where P = loan amount (home price − down payment), r = monthly interest rate (annual rate ÷ 12), n = total months (years × 12).

Total monthly payment also includes: property tax (typically 0.5–2% of home value annually ÷ 12), homeowner's insurance (~0.5–1% of home value ÷ 12), and PMI (private mortgage insurance if down payment < 20%, typically 0.5–1% of loan amount annually).

Example: $350,000 home, 20% down ($70,000), $280,000 loan at 7% for 30 years:

r = 0.07/12 = 0.00583, n = 360. M = 280,000 × [0.00583 × (1.00583)^360] / [(1.00583)^360 – 1] = $1,863/month P&I.

How to Use the Mortgage Calculator: Step by Step

Enter home price and down payment
The loan amount is home price minus down payment. A 20% down payment eliminates PMI and reduces the loan significantly.
Set the interest rate
Use the rate quoted by lenders (APR for comparison). Current rates vary — check Bankrate or Freddie Mac for weekly averages.
Choose loan term
30-year loans have lower payments but much higher total interest. 15-year loans save enormously in interest but require higher monthly payments.
Add taxes and insurance
For your true monthly cost, include property tax (check your county assessor's website) and homeowners insurance (typically $100–200/month).
Test extra payments
Enter $100, $200, or $500 extra monthly to see how much interest you save and how many years you cut from the term. The savings are dramatic.

Mortgage Calculator Examples: Real-World Scenarios

$400,000 Home — 20% Down, 30 vs 15 Year Comparison

Rachel is buying a $400,000 home with $80,000 down at 7% APR. Comparing 30-year vs 15-year loan.

Loan amount:$320,000

Rate:7%

30-year payment:$2,129/month

15-year payment:$2,876/month

Calculation

30-year total: $2,129×360 = $766,440 | 15-year total: $2,876×180 = $517,680

Result

The 15-year loan costs $248,760 less in total. Monthly payment is $747 more, but you save nearly $250K and pay off 15 years sooner. If Rachel can afford the higher payment, it's financially optimal.

Extra $500/Month on a $300,000 Loan at 6.5%

Daniel has a $300,000 30-year mortgage at 6.5%. He's considering paying an extra $500/month.

Standard payment:$1,896/month

Extra payment:$500/month

Total payment:$2,396/month

Calculation

Standard: 30 years, $382,560 interest. With $500 extra: payoff in ~21 years, interest ~$233,000

Result

Extra $500/month saves $149,000 in interest and pays off 9 years early. Total extra paid: $500×252 months = $126,000 extra principal — saves more than it costs in extra payments.

First-Time Buyer — How Much Can I Afford?

Sofia earns $85,000/year and wants to know the maximum home price she can qualify for.

Annual income:$85,000

Monthly gross:$7,083

Max PITI (28% rule):$1,983/month

Estimated rate:7%

Calculation

At 7%/30yr, $1,983 P&I payment = ~$297,000 loan. With $60K down payment: $357,000 max home price

Result

Sofia can comfortably afford up to ~$357,000 using the 28% housing expense rule. With existing debts, the 36% total debt rule may reduce this further.

Common Mistakes to Avoid

Focusing only on the monthly payment — a longer term reduces the monthly payment but dramatically increases total interest paid.
Forgetting property tax and insurance — PITI (principal, interest, tax, insurance) is your true monthly cost, often 30–40% higher than P&I alone.
Not comparing APR across lenders — the APR (Annual Percentage Rate) includes fees and points; a lower interest rate with high fees may cost more than a slightly higher rate with no fees.
Waiting for the "perfect" rate — timing the market is unreliable. Refinancing is always an option if rates drop significantly later.

Tips & Tricks

Putting 20% down eliminates PMI, saves 0.5–1% of the loan annually. On a $300,000 loan that's $1,500–3,000/year in savings.
Biweekly payments (half the monthly payment every 2 weeks) result in 13 full payments per year instead of 12, cutting years off a 30-year mortgage.
Consider mortgage points: paying 1 point (1% of loan) upfront typically reduces rate by 0.25%. Break-even is usually 5–8 years — only worth it if you plan to stay that long.

A mortgage is a decades-long commitment worth understanding completely before signing. Our mortgage calculator puts the full financial picture at your fingertips — compare scenarios, test the impact of extra payments, and enter your lender conversation informed. For authoritative current rates, the Consumer Financial Protection Bureau and Freddie Mac publish weekly national mortgage rate surveys.

Mortgage Calculator — Frequently Asked Questions

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Authoritative References

CFPB — Buying a Home

consumerfinance.gov — Official government home buying tools and guidance

Freddie Mac — Primary Mortgage Market Survey

freddiemac.com — Weekly national average mortgage rate data

External links open in a new tab. OmniCalc.us is not affiliated with these organisations.

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