How this calculator works
Your monthly payment has up to five parts:
- Principal and interest, from the standard amortization formula for a fixed-rate loan.
- Property tax, the yearly rate times the home price, divided by 12. Picking a state fills in that state's typical effective rate from Census data; replace it with the real tax bill for the home you want.
- Homeowners insurance, your yearly premium divided by 12. Get a quote for the actual home, because premiums vary a lot by location.
- Mortgage insurance. FHA uses HUD's annual MIP table (0.55% a year on a typical 30-year loan with less than 5% down). USDA charges a 0.35% annual fee. Conventional PMI is an estimate by down payment, since lenders price it by credit score; it ends once you reach enough equity. VA loans have none.
- HOA dues, if the home has them.
FHA, VA and USDA loans also charge an upfront fee (1.75% upfront MIP, the VA funding fee, or USDA's 1% guarantee fee). The calculator assumes you add it to the loan, which is what most buyers do, so the amount borrowed is a little higher than the price minus your down payment.
Reading the result
Compare the total with your take-home pay, not just the lender's approval. The interest rate here is an example: enter the rate from your Loan Estimate to see your real number. The amortization chart shows why extra principal payments early in the loan save the most interest.