How much down payment do I need for a mortgage?

Conventional loans typically require 5–20% down. FHA loans allow as little as 3.5% with a credit score of 580 or above. VA loans (for veterans) and USDA loans (rural areas) can require 0% down. However, putting less than 20% down on a conventional loan means paying PMI, which typically costs 0.5–1.5% of the loan amount per year.

What is PMI and when does it go away?

Private Mortgage Insurance protects the lender if you default, and is required when your down payment is below 20%. By law (the Homeowners Protection Act), lenders must automatically cancel PMI when your loan balance reaches 78% of the original home value. You can also request cancellation once you reach 80% loan-to-value through payments or appreciation — just contact your lender.

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

A 30-year mortgage has lower monthly payments, making it more affordable month to month, but you pay significantly more total interest over the life of the loan. A 15-year mortgage typically has a lower interest rate, builds equity twice as fast, and costs far less in total interest — but monthly payments are roughly 40–50% higher. Use the Compare Loans tab above to see the exact difference for your numbers.

How do extra payments affect a mortgage?

Extra payments go directly toward the principal balance, which reduces the amount on which future interest is calculated. Even one extra payment per year on a 30-year mortgage can shorten the loan by 4–5 years and save tens of thousands in interest. The benefit compounds — the earlier in the loan you make extra payments, the greater the impact.

What is an amortization schedule?

An amortization schedule shows how each payment is split between interest and principal throughout the loan. Early in a mortgage, the vast majority of each payment covers interest because the balance is highest. As years pass and the balance falls, an increasing share of each payment goes toward principal. The year-by-year table in the calculator above shows this shift clearly.

How is mortgage affordability calculated?

Lenders typically use two rules: your monthly housing costs (PITI) should not exceed 28% of gross monthly income (front-end ratio), and your total monthly debt payments should not exceed 36–43% of gross income (back-end ratio). The affordability tab in the calculator uses the 28% front-end guideline as the primary constraint, while also factoring in your down payment.

Does a higher credit score get a better mortgage rate?

Yes, significantly. A borrower with a 760+ credit score typically qualifies for rates 0.5–1.5% lower than a borrower with a 640 score. On a $300,000 loan over 30 years, a 1% rate difference equals roughly $60,000 in total interest. Improving your credit score before applying — by paying down debts and clearing errors — can save a substantial amount over the life of the loan.

What is loan-to-value ratio (LTV)?

LTV is the loan amount divided by the property value, expressed as a percentage. A $320,000 loan on a $400,000 home is an 80% LTV. Lenders use LTV to assess risk — lower LTV means more equity and less risk. An LTV below 80% typically means no PMI requirement and access to better interest rates.

Can I pay off my mortgage early without penalty?

Most modern mortgages in the US do not have prepayment penalties, especially on conventional loans. However, some loan types — particularly certain adjustable-rate mortgages and loans from non-traditional lenders — may include prepayment penalty clauses. Always check your loan agreement or ask your lender before making large extra payments.

Finance

Mortgage Calculator

Calculate your monthly mortgage payment, compare two loan options side by side, or find out what home price fits your budget. Includes property taxes, insurance, PMI, and a full amortization schedule.

Home price

Down payment

Interest rate (%)

Loan term

Monthly costs (optional)

Property tax (/month)

Home insurance (/month)

PMI (/month — if <20% down)

HOA fee (/month)

Extra payments (optional)

Extra monthly payment

Payment frequency

Total monthly payment

—

Principal & interest—

Property tax—

Home insurance—

PMI—

HOA fee—

Loan amount—

Total interest paid—

Total cost of loan—

Payoff date—

20% equity reached—

What goes into a mortgage payment

Lenders call it PITI — Principal, Interest, Taxes, and Insurance. The principal and interest portion is determined by your loan amount, rate, and term, and stays fixed for the life of a fixed-rate mortgage. Property tax and homeowners insurance are typically collected monthly and held in escrow, then paid directly to the taxing authority and insurer on your behalf. PMI is added when your down payment is less than 20%, and HOA fees apply in many planned communities and condominiums.

The calculator separates all of these so you can see exactly where your money goes each month — and how much the extras add to the headline payment.

The mortgage payment formula

M = P × [r(1+r)^n] ÷ [(1+r)^n − 1] M = monthly principal & interest payment P = loan amount (price minus down payment) r = monthly interest rate (annual rate ÷ 12) n = total number of payments (years × 12)

For example: a $320,000 loan (80% of $400,000) at 6.75% for 30 years. Monthly rate = 6.75% ÷ 12 = 0.5625%. The principal and interest payment works out to $2,076 per month. Add property tax, insurance, and any other costs to get the total PITI.

15-year vs 30-year mortgage

The term length is one of the most consequential decisions in a mortgage. A 30-year mortgage keeps monthly payments lower and frees up cash flow, but you pay interest for twice as long. A 15-year mortgage typically comes with a lower interest rate and builds equity far faster, but requires a significantly higher monthly commitment.

Feature	15-year	30-year
Monthly payment	Higher	Lower
Interest rate	Typically lower	Typically higher
Total interest paid	Much less	Much more
Equity build speed	Fast	Slow
Cash flow flexibility	Less	More
Best for	Higher income, wants to pay off fast	Wants lower payments, values flexibility

Use the Compare Loans tab above to enter your actual numbers and see the exact difference in monthly payment, total interest, and total cost.

How extra payments cut your mortgage short

Every dollar of extra payment goes directly toward the principal balance, reducing future interest charges. On a typical 30-year mortgage, making one extra monthly payment per year shortens the loan by roughly 4–5 years. Paying an extra $200 per month on a $300,000 loan at 6.75% saves over $80,000 in interest and cuts nearly 7 years off the term.

The key principle: extra payments have the greatest impact when made early in the loan, because that is when the balance — and therefore the interest — is highest.

Common questions

A full mortgage payment is often called PITI — Principal, Interest, Taxes, and Insurance. The principal and interest portion pays down your loan. Property taxes and homeowners insurance are typically collected monthly by the lender and held in an escrow account, then paid on your behalf when due. PMI (Private Mortgage Insurance) is added if your down payment is less than 20%.
Conventional loans typically require 5–20% down. FHA loans allow as little as 3.5% with a credit score of 580 or above. VA loans (for veterans) and USDA loans (rural areas) can require 0% down. However, putting less than 20% down on a conventional loan means paying PMI, which typically costs 0.5–1.5% of the loan amount per year.
Private Mortgage Insurance protects the lender if you default, and is required when your down payment is below 20%. By law (the Homeowners Protection Act), lenders must automatically cancel PMI when your loan balance reaches 78% of the original home value. You can also request cancellation once you reach 80% loan-to-value through payments or appreciation — just contact your lender.
A 30-year mortgage has lower monthly payments, making it more affordable month to month, but you pay significantly more total interest over the life of the loan. A 15-year mortgage typically has a lower interest rate, builds equity twice as fast, and costs far less in total interest — but monthly payments are roughly 40–50% higher. Use the Compare Loans tab above to see the exact difference for your numbers.
Extra payments go directly toward the principal balance, which reduces the amount on which future interest is calculated. Even one extra payment per year on a 30-year mortgage can shorten the loan by 4–5 years and save tens of thousands in interest. The benefit compounds — the earlier in the loan you make extra payments, the greater the impact.
An amortization schedule shows how each payment is split between interest and principal throughout the loan. Early in a mortgage, the vast majority of each payment covers interest because the balance is highest. As years pass and the balance falls, an increasing share of each payment goes toward principal. The year-by-year table in the calculator above shows this shift clearly.
Lenders typically use two rules: your monthly housing costs (PITI) should not exceed 28% of gross monthly income (front-end ratio), and your total monthly debt payments should not exceed 36–43% of gross income (back-end ratio). The affordability tab in the calculator uses the 28% front-end guideline as the primary constraint, while also factoring in your down payment.
Yes, significantly. A borrower with a 760+ credit score typically qualifies for rates 0.5–1.5% lower than a borrower with a 640 score. On a $300,000 loan over 30 years, a 1% rate difference equals roughly $60,000 in total interest. Improving your credit score before applying — by paying down debts and clearing errors — can save a substantial amount over the life of the loan.
LTV is the loan amount divided by the property value, expressed as a percentage. A $320,000 loan on a $400,000 home is an 80% LTV. Lenders use LTV to assess risk — lower LTV means more equity and less risk. An LTV below 80% typically means no PMI requirement and access to better interest rates.
Most modern mortgages in the US do not have prepayment penalties, especially on conventional loans. However, some loan types — particularly certain adjustable-rate mortgages and loans from non-traditional lenders — may include prepayment penalty clauses. Always check your loan agreement or ask your lender before making large extra payments.