Mortgage Calculator
Calculate your monthly mortgage payment with full amortization schedule. Compare rates, terms, and down payments instantly.
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15 vs 30-Year Mortgage ($400,000)
| 15-Year | 30-Year | |
|---|---|---|
| Monthly Payment | $2,832 | $2,129 |
| Total Interest | $189,708 | $446,428 |
| Total Cost | $509,708 | $766,428 |
| Interest Saved | $256,721 | — |
Rate Impact on $400,000 Mortgage
| Rate | Monthly | Total Interest |
|---|---|---|
| 5.5% | $1,817 | $334,093 |
| 6% | $1,919 | $370,682 |
| 6.5% | $2,023 | $408,142 |
| 7% | $2,129 | $446,428 |
| 7.5% | $2,237 | $485,495 |
| 8% | $2,348 | $525,297 |
How Mortgage Payments Are Calculated
Your monthly mortgage payment (principal + interest) is calculated using the standard amortization formula: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ - 1] where P = loan amount, r = monthly interest rate, and n = number of payments.
Early payments are mostly interest. As you pay down the principal, more of each payment goes toward principal. A 30-year $400,000 mortgage at 7% means your first payment is about $1,867 in interest and only $262 in principal.
Your actual monthly cost also includes property taxes (~1-2% of home value annually), homeowners insurance ($150-300/month), and possibly PMI (if down payment < 20%, typically 0.5-1.5% of loan value annually).
The True Cost of a Mortgage
The sticker price of a home is only the beginning. On a $400,000 home with 20% down at 7% for 30 years, you'll pay $446,428 in interest alone — that's 140% of the loan amount on top of principal.
Add property taxes (1-2% of home value annually), homeowners insurance, and maintenance (budget 1% of home value per year), and the true 30-year cost of a $400,000 home can exceed $900,000. Understanding these numbers upfront helps you budget realistically and choose the right loan terms.
Shortening your term makes a dramatic difference: a 15-year mortgage on the same home costs $2,832/month — more than 30-year — but saves $256,721 in total interest.
First-Time Homebuyer Guide
Buying your first home is one of the biggest financial decisions you'll make. Here's a practical roadmap:
- Check your credit score. A 740+ score gets the best mortgage rates. Below 620, you may need an FHA loan. Every 20-point improvement can save you 0.125-0.25% on your rate.
- Calculate your budget. Use the 28/36 rule — spend no more than 28% of gross income on housing, and 36% on total debt. Our calculator shows exactly what you can afford.
- Save beyond the down payment. Budget for closing costs (2-5% of purchase price), moving expenses, and a 3-6 month emergency fund. Don't drain your savings to maximize your down payment.
- Get pre-approved, not just pre-qualified. Pre-approval involves a credit check and income verification — sellers take pre-approved offers more seriously.
- Compare at least 3 lenders. Rates, fees, and terms vary significantly. Even 0.25% lower on a $320,000 loan saves over $20,000 in interest over 30 years.
- Understand your loan options. Conventional, FHA, VA, and USDA loans all serve different borrower profiles. The right choice depends on your credit, down payment, and eligibility.
Mortgage FAQ
How much house can I afford?
As a rule of thumb, you can afford a home priced at 3-4× your annual income. With the 28% rule, a $100,000 income supports roughly a $2,333/month payment, which buys about a $438,000 home (20% down, 7%, 30yr).
What is the difference between fixed-rate and adjustable-rate mortgages?
A fixed-rate mortgage locks your interest rate for the full term — your payment never changes. An adjustable-rate mortgage (ARM) offers a lower initial rate for 5-7 years, then adjusts annually. Fixed rates provide certainty; ARMs are better for short-term ownership.
How much should I put down on a house?
20% eliminates PMI and gives you the best rates. But many buyers start with 3-10% down. On a $400,000 home, 20% is $80,000, while 5% is just $20,000. The trade-off is higher monthly payments and PMI until you reach 20% equity.
What credit score do I need to buy a house?
Most conventional loans require 620+. FHA loans accept 580+ (or 500 with 10% down). VA and USDA loans have no official minimums but lenders typically want 620+. For the best rates, aim for 740 or higher.
Should I choose a 15-year or 30-year mortgage?
A 30-year mortgage has lower payments but costs more in interest. A 15-year saves significantly on interest but requires higher monthly payments. On $400,000: 30-year costs $2,129/mo; 15-year costs $2,832/mo but saves $256,721.
What are closing costs?
Closing costs are fees paid at the end of a real estate transaction — typically 2-5% of the purchase price. They include lender fees, appraisal, title insurance, attorney fees, and prepaid taxes/insurance. On a $400,000 home, budget $8,000-$20,000.
What is PMI and how do I avoid it?
Private mortgage insurance (PMI) is required when you put less than 20% down. It costs 0.5-1.5% of your loan annually. Avoid it by putting 20%+ down, using a VA loan, or requesting removal once you reach 20% equity.
How do mortgage interest rates affect my payment?
Every 0.5% rate increase adds roughly $109/month on a $320,000 loan. Over 30 years, that 0.5% costs an extra $39,067 in total interest. Shopping rates is one of the most impactful things you can do.