Mortgage Calculator

PMI (Private Mortgage Insurance) is required when your down payment is less than 20% of the home price. It protects the lender, not you, in case of default. PMI typically costs 0.5%–1.5% of the loan amount annually. By law (Homeowners Protection Act), your lender must automatically cancel PMI when your loan-to-value ratio reaches 78% through normal payments. You can request cancellation at 80% LTV. Our calculator shows exactly when PMI drops off in your amortization schedule.

A 15-year mortgage has higher monthly payments but saves dramatically on total interest (often $100K–$200K+ less). The rate is typically 0.5–0.75% lower too. Choose 15-year if you can comfortably afford the higher payment without sacrificing emergency savings or retirement contributions. Choose 30-year for lower payments and more financial flexibility. Use our 15yr vs 30yr tab to see exact numbers for your situation.

The 28/36 rule is the standard guideline: your total housing costs (mortgage + taxes + insurance) should be no more than 28% of gross monthly income, and total debt payments should be under 36%. For a $95,000 annual income, that means housing costs under ~$2,217/month. Our Affordability tab calculates this for you and shows what home price you can afford at different down payment levels.

Closing costs are fees paid at the time of purchase, typically 2–5% of the home price. They include loan origination fees, appraisal, title insurance, attorney fees, recording fees, escrow deposits, and prepaid interest. On a $400,000 home, expect $8,000–$20,000. These are IN ADDITION to your down payment. Our Closing Costs tab gives a detailed itemized estimate. Remember: many closing costs are negotiable.

It depends on how long you'll stay, local housing costs vs rents, and your financial situation. Buying builds equity and provides stability, but costs more upfront (down payment + closing costs) and includes maintenance. Renting is more flexible with lower upfront costs. Our Rent vs Buy calculator does the full math: factoring in rent increases, home appreciation, equity building, tax deductions, and maintenance costs to find your breakeven point.

Refinancing makes sense when the monthly savings outweigh the closing costs within a reasonable timeframe. A common rule of thumb: if you can lower your rate by 0.75%–1% or more AND you plan to stay in the home long enough to pass the breakeven point (usually 18–36 months), refinancing is worth considering. Our Refinance tab calculates the exact breakeven point and total interest savings for your specific situation.

With biweekly payments, you make 26 half-payments per year instead of 12 full payments. That's equivalent to 13 monthly payments — one extra payment per year directed entirely toward principal. On a $320,000 loan at 6.5%, biweekly payments can save roughly $47,000 in interest and pay off your mortgage 4–5 years early. It's the simplest way to accelerate your payoff without a big financial commitment.

An escrow account is set up by your lender to collect and pay property taxes and homeowner's insurance on your behalf. Each month, a portion of your mortgage payment goes into escrow. When tax and insurance bills come due, the lender pays them from this account. This ensures these critical bills are always paid. At closing, you typically deposit 2–3 months of taxes and insurance into the escrow account upfront.