How to Use This Calculator

1. Enter the home price — the full purchase price of the property you're considering.
2. Set your down payment — enter either a dollar amount or a percentage; the other field updates automatically. Most conventional loans require at least 3–20% down.
3. Choose a loan term — select 10, 15, 20, or 30 years. Shorter terms mean higher monthly payments but far less total interest paid over the life of the loan.
4. Enter the interest rate — use the annual rate quoted by your lender, or a current market average as a baseline for comparison.
5. Review the payment summary — your estimated monthly payment, total cost, and total interest appear instantly. Expand the amortization schedule to see the year-by-year and month-by-month breakdown.

Frequently Asked Questions

• What is a good debt-to-income (DTI) ratio for a mortgage?
  Most lenders prefer a front-end DTI (housing costs ÷ gross monthly income) under 28% and a back-end DTI (all monthly debt payments ÷ gross income) under 36–43%. FHA loans may allow up to 50% back-end DTI with compensating factors. A lower DTI generally qualifies you for better rates and larger loan amounts.
• What's the difference between interest rate and APR?
  The interest rate is the base cost to borrow the principal — it's what determines your monthly payment. The APR (Annual Percentage Rate) is broader: it includes the interest rate plus lender fees, origination costs, and points, expressed as a single annual figure. APR is the more complete comparison tool when shopping multiple lenders. This calculator uses the simple interest rate to compute monthly payments.
• How much house can I afford?
  A common starting rule is to keep your total monthly housing payment (principal, interest, taxes, and insurance) under 28% of your gross monthly income. For example, at $8,000/month gross income, aim for housing costs under $2,240/month. Use this calculator to test different home prices and down payments until the monthly payment fits within that range. Keep in mind that property taxes, homeowner's insurance, HOA fees, and PMI add to the base mortgage payment shown here.

Glossary

• Amortization The process of paying off a loan through scheduled, fixed payments over time. Each payment covers both interest (front-loaded early in the loan) and principal. The amortization schedule shows exactly how these amounts shift over the life of the loan — early payments are mostly interest; later payments are mostly principal.
• Escrow An account held by your lender that collects a portion of your monthly payment to cover property taxes and homeowner's insurance. Instead of paying these large annual bills yourself, the lender pays them from the escrow balance on your behalf. Escrow is not included in the payment shown by this calculator.
• PMI Private Mortgage Insurance — required by most conventional lenders when your down payment is less than 20% of the home price. PMI protects the lender if you default. It typically costs 0.5–1.5% of the loan amount per year and can be removed once you reach 20% equity. This calculator does not include PMI.
• Points Upfront fees paid at closing to reduce your interest rate. One point equals 1% of the loan amount. Paying points (buying down the rate) makes sense if you plan to hold the loan long enough for the monthly savings to recover the upfront cost — a break-even period that typically ranges from 3–7 years.
• Principal The original amount borrowed — the loan balance after subtracting your down payment from the purchase price. Each monthly payment reduces the principal by a small amount early in the loan and increasingly more over time as the outstanding balance shrinks and interest charges decrease.