Mortgage Calculator

A common guideline is the 28/36 rule: spend no more than 28% of your gross monthly income on housing and no more than 36% on total debt. Your real budget also depends on your down payment, interest rate, and existing debts. Use the Affordability tab above to get a recommended and maximum home price from your own numbers.

The 28/36 rule is a budgeting benchmark lenders use. The first number means your monthly housing payment (principal, interest, taxes, and insurance) should be at or below 28% of gross monthly income. The second means all your monthly debt payments combined — housing plus car loans, student loans, and credit cards — should be at or below 36%.

Private mortgage insurance (PMI) is usually required when your down payment is under 20%. It protects the lender (not you) if you default, and typically costs about 0.5%–1% of the loan amount per year, added to your monthly payment. Once you reach 20% equity — an 80% loan-to-value ratio — you can generally request to cancel it, which is the highlighted row in the amortization schedule.

A 15-year mortgage has higher monthly payments but usually a lower interest rate and dramatically less total interest. A 30-year mortgage spreads payments out, so each month is more affordable, but you pay much more interest over time. Try both in the Mortgage tab and compare the "total interest paid" figure in the Amortization tab.

On a $300,000 home, a 20% down payment is $60,000. At 10% it's $30,000, at 5% it's $15,000, and an FHA-style 3.5% down payment is $10,500. Putting down less than 20% generally means paying PMI until you build enough equity.

Conventional loans typically require a score of 620 or higher. FHA loans can go as low as 580 (or 500 with a 10% down payment). The best interest rates usually go to borrowers with scores of 740+. Raising your score before applying can meaningfully lower your monthly payment.

Add up all your monthly debt payments, divide by your gross (pre-tax) monthly income, and multiply by 100. For example, $2,000 of debt payments on $6,000 of income is a 33% DTI. Most lenders look for a DTI of 43% or lower, and a lower ratio improves your approval odds and rate.

Refinancing can pay off when a lower rate saves you enough each month to recover your closing costs within a reasonable break-even window — and you plan to stay in the home past that point. Use the Refinance tab to see your monthly savings, break-even in months, and total lifetime savings before deciding.