Mortgage Calculator

Monthly mortgage payment is calculated using the amortization formula: M = P[r(1+r)^n]/[(1+r)^n-1], where P is the loan amount, r is the monthly interest rate, and n is the number of payments. This gives you the principal and interest portion. Add property tax, insurance, and HOA for your total monthly payment.

While 20% down payment is traditional to avoid PMI, you can put down as little as 3-5% for conventional loans or 0% for VA loans. A larger down payment means lower monthly payments and less interest paid over time.

Private Mortgage Insurance (PMI) is required when your down payment is less than 20% of the home price. PMI typically costs 0.5-1% of the loan amount annually and can be removed once you reach 20% equity.

A 15-year mortgage has higher monthly payments but saves significantly on interest. A 30-year mortgage has lower payments but costs more over time. Choose based on your monthly budget and long-term financial goals.

A common guideline is the 28/36 rule: spend no more than 28% of gross monthly income on housing costs, and no more than 36% on total debt. On a $75,000 salary, that's about $1,750/month for housing, which supports roughly a $300,000-$350,000 home depending on rates and down payment.

Minimum credit scores vary by loan type: FHA loans require 580+ (or 500 with 10% down), conventional loans typically need 620+, and the best rates go to borrowers with 740+. Higher scores mean lower interest rates and significant savings over the life of the loan.

Closing costs are fees paid when finalizing your mortgage, typically 2-5% of the loan amount. They include appraisal fees, title insurance, attorney fees, and prepaid items like property taxes and insurance. On a $300,000 loan, expect $6,000-$15,000 in closing costs.