US Mortgage Calculator

The headline payment has four parts (PITI): principal, interest, taxes, and insurance. On a $400,000 loan at 7% over 30 years, the principal-and-interest portion is about $2,661 a month. Add property tax (varies wildly: $200/month in Alabama on a $400k home, $1,000/month in New Jersey), homeowners insurance ($150-300/month for most homes), and PMI if you put less than 20% down (around $200/month on a $400k loan with 10% down).

A 7% mortgage rate is dramatically more expensive over the life of the loan than the 3% rates many homeowners locked in during 2020-2021. On the same $400k loan, total interest paid over 30 years is $238,000 at 3% but $558,000 at 7%. The monthly difference of about $1,000 compounds into more than $300,000 over the loan.

Lenders use the 28/36 rule as a baseline: housing should not exceed 28% of gross income, total debt 36%. A household earning $120,000/year ($10,000/month) can usually qualify for housing payments up to $2,800/month, which translates to roughly a $350,000 home with 10% down at current rates. Many lenders will stretch this with strong credit and savings, but stretching usually means feeling house-poor.

The down payment matters less than people think for monthly affordability but a lot for the lifetime cost. A 5% down payment with PMI vs 20% down on the same house adds about $200/month for several years, then disappears once you reach 20% equity. Use the [US Home Affordability Calculator](/us-home-affordability-calculator) to model both monthly comfort and total cost across down payment options.

Discount points let you pay an upfront fee (typically 1% of the loan) to drop the rate by about 0.25%. The break-even point is usually 5-7 years - if you plan to stay longer than that, points pay off; if you might move or refinance, they do not. Origination points are different (lender fees) and rarely worth paying for.

Adjustable-rate mortgages (ARMs) start with a lower fixed period (5/1, 7/1, 10/1) then float. They made sense when fixed rates were 7%+ and ARMs were 5%, less so when both are similar. The 30-year fixed remains the US default because it is uniquely portable, prepayable without penalty, and bakes in 30 years of inflation protection.

On top of the down payment, closing costs typically run 2-5% of the loan amount: lender origination, appraisal ($500-700), title insurance ($1,000-3,000), recording fees, prepaid taxes and insurance, and prepaid interest. On a $400k loan that is $8,000-20,000 cash needed at closing on top of the down payment.

Some costs are negotiable (origination, title), some are fixed (recording, appraisal). Sellers will often agree to cover a percentage of closing costs in a soft market. Use the [US Closing Costs Calculator](/us-closing-costs-calculator) to estimate the full cash-to-close before making an offer.