Mortgage Calculator

A typical mortgage payment consists of four main components, often referred to as PITI: Principal (the amount borrowed), Interest (the cost of borrowing), Taxes (property taxes), and Insurance (homeowners insurance and possibly PMI). Our calculator includes all these components to give you an accurate monthly payment estimate.

Private Mortgage Insurance (PMI) is typically required when your down payment is less than 20% of the home's purchase price. PMI protects the lender if you default on your loan. Once you reach 20% equity in your home, you can usually request to have PMI removed from your mortgage payments. The cost is usually between 0.5% to 1% of the loan amount annually.

There are several ways to lower your monthly mortgage payment:

• Make a larger down payment to reduce the principal amount
• Extend the loan term (e.g., from 15 to 30 years)
• Find a loan with a lower interest rate
• Improve your credit score before applying to qualify for better rates
• Buy a less expensive home
• Remove PMI once you reach 20% equity
• Refinance your mortgage if rates have dropped since you obtained your loan

You can use our calculator to see how these different factors affect your payment.

A fixed-rate mortgage has the same interest rate throughout the entire loan term, meaning your principal and interest payment will never change. This provides stability and predictability for budgeting.

An adjustable-rate mortgage (ARM) typically starts with a lower interest rate for an initial period (e.g., 5, 7, or 10 years), after which the rate can adjust periodically based on market conditions. ARMs are often named according to their adjustment schedule - for example, a 5/1 ARM has a fixed rate for 5 years, then adjusts every 1 year after that.

ARMs can be beneficial if you plan to sell or refinance before the initial fixed period ends, or if interest rates are expected to decrease in the future.

An amortization schedule shows how your loan balance decreases over time as you make payments. It helps you understand:

• How much of each payment goes toward principal versus interest
• How much total interest you'll pay over the life of the loan
• When you'll reach certain equity milestones (e.g., 20% to eliminate PMI)
• The impact of making extra payments or refinancing

This information can be valuable for planning prepayments or understanding the long-term cost of your mortgage.

When applying for a mortgage, you'll typically need to provide:

• Proof of income (W-2 forms, pay stubs, tax returns for 2+ years)
• Employment verification (employer contact information)
• Proof of assets (bank statements, investment accounts)
• Credit history and FICO score
• Debt information (student loans, car loans, credit cards)
• Identity documents (driver's license, Social Security number)
• Information about the property you want to purchase

Having these documents ready can speed up the application process and help you secure the best possible loan terms.

The ideal down payment amount depends on your financial situation and the type of mortgage:

• Conventional loans: Typically require 3-20% down
• FHA loans: Minimum 3.5% down with a credit score of 580+
• VA loans: Can offer 0% down for eligible veterans
• USDA loans: Can offer 0% down for eligible rural properties

A 20% down payment is often recommended as it eliminates the need for PMI, lowers your monthly payment, and reduces the total interest paid over the life of the loan. However, many homebuyers successfully purchase with less down, especially first-time buyers.