How much house can I afford with my salary?

A general rule is that your monthly mortgage payment should not exceed 28% of your gross monthly income. For a $60,000 annual salary, aim for a monthly payment under $1,400. Use our calculator to determine the loan amount that fits this budget.

What happens if I pay extra on my mortgage every month?

Extra payments go directly toward the principal balance, reducing the total interest paid and shortening the loan term. For example, adding $100 monthly to a $300,000 30-year mortgage at 6.5% can save over $54,000 in interest and pay off the loan 4+ years early.

Should I refinance if rates drop 1%?

Generally, refinancing makes sense if you can lower your rate by 0.5-1% and plan to stay in your home for several years. Consider closing costs (typically 2-3% of loan amount) and how long it takes to break even. Our calculator can help you compare scenarios.

How do property taxes affect my monthly payment?

Property taxes are typically included in your total monthly payment through an escrow account. They vary by location but average 1-2% of home value annually. A $300,000 home might have $3,000-6,000 yearly in taxes, adding $250-500 to your monthly payment.

What is the difference between fixed and adjustable rates?

Fixed-rate mortgages maintain the same interest rate throughout the loan term, providing predictable payments. Adjustable-rate mortgages (ARMs) start with lower rates that change periodically based on market conditions, potentially increasing your payment over time.

How much do I need for a down payment?

Down payments typically range from 3-20% of the home price. Conventional loans often require 5-20%, while FHA loans allow as little as 3.5%. A 20% down payment helps you avoid private mortgage insurance (PMI) and reduces your loan amount and monthly payment.

What is PMI and when can I remove it?

Private Mortgage Insurance (PMI) is required when you put down less than 20% on a conventional loan. It typically costs 0.3-1.5% of the loan amount annually. You can request removal when you reach 20% equity, and it automatically cancels at 22% equity.

How does my credit score affect my mortgage rate?

Higher credit scores qualify for better interest rates. A score of 740+ typically gets the best rates, while scores below 620 may face higher rates or require FHA loans. A 1% rate difference on a $300,000 loan can mean $200+ more per month.

What closing costs should I expect?

Closing costs typically range from 2-5% of the loan amount and include appraisal fees, title insurance, origination fees, and prepaid items like property taxes and insurance. On a $300,000 loan, expect $6,000-15,000 in closing costs.

Is it better to pay points to lower my rate?

Paying points (1 point = 1% of loan amount) can lower your rate by about 0.25%. It makes sense if you plan to stay in the home long enough to recoup the upfront cost through monthly savings. Calculate the break-even point before deciding.

Mortgage Calculator

Calculate monthly mortgage payments, total interest, and view detailed amortization schedules.

How to Use This Mortgage Calculator

Step-by-Step:

1. Loan Amount: Enter the total amount you're borrowing
2. Interest Rate: Input your annual interest rate
3. Loan Term: Choose loan duration (usually 15 or 30 years)
4. Extra Payment: Add optional extra monthly payment
5. Calculate: Click to see your results

Real Example:

Loan: $300,000 at 6.5% for 30 years

Monthly Payment: ~$1,896

Total Interest: ~$382,633

With $200 extra: Save ~$97,000!

Key Features:

• Amortization Schedule: See payment breakdown by month
• Extra Payment Impact: Calculate interest savings
• CSV Export: Download full payment schedule
• Common Scenarios: Quick preset calculations
• Real-Time Updates: Results update as you type

Loan Details

Loan Amount ($)

Annual Interest Rate (%)

Loan Term (years)

Extra Monthly Payment ($)

Loan Comparison

Tips

• Higher down payment = lower monthly payment
• Extra payments reduce total interest
• Shop around for the best interest rates
• Consider 15-year vs 30-year terms