Frequently Asked Questions
Find answers to common questions about mortgage calculations and using our calculator.
How is my monthly mortgage payment calculated?
Your monthly payment includes principal and interest (P&I), calculated using the loan amount, interest rate, and loan term. If you include property taxes, insurance, and HOA fees, these are added to create your total monthly payment.
Learn more →What is an amortization schedule?
An amortization schedule shows how your loan balance decreases over time. It breaks down each payment into principal and interest portions, showing how much of each payment goes toward reducing your loan balance versus paying interest.
Learn more →How much house can I afford?
Most lenders use the 28/36 rule: your housing costs shouldn't exceed 28% of gross monthly income, and total debt shouldn't exceed 36%. However, your true affordability depends on your lifestyle, goals, and comfort level.
Learn more →Should I make a larger down payment?
A larger down payment reduces your loan amount, monthly payment, and total interest paid. It may also help you avoid PMI (Private Mortgage Insurance) if you put down 20% or more. However, you should balance this with maintaining adequate savings.
Learn more →What is PMI and when do I need it?
Private Mortgage Insurance (PMI) is typically required when your down payment is less than 20% of the home's purchase price. PMI protects the lender if you default on the loan and is usually 0.5% to 1% of the loan amount annually.
Learn more →How does the interest rate affect my payment?
The interest rate significantly impacts both your monthly payment and total interest paid over the life of the loan. Even a small difference in rate (e.g., 0.25%) can save thousands of dollars over a 30-year mortgage.
Learn more →What determines my mortgage interest rate?
Your rate is influenced by economic factors (Fed policy, inflation, treasury yields) and personal factors (credit score, down payment, loan type, DTI ratio). Your credit score alone can make a 1%+ difference in your rate.
Learn more →Should I rent or buy?
It depends on how long you'll stay (5+ years favors buying), your local market's price-to-rent ratio, your financial stability, and lifestyle preferences. Buying builds equity but requires more upfront capital and reduces flexibility.
Learn more →Can I make extra payments?
Yes! Making extra principal payments can significantly reduce your total interest paid and shorten your loan term. Even small additional payments can make a big difference over time.
Learn more →What's the difference between a 15-year and 30-year mortgage?
A 15-year mortgage has higher monthly payments but significantly lower total interest paid. A 30-year mortgage has lower monthly payments but costs more in interest over the life of the loan. Choose based on your budget and financial goals.
Learn more →How do property taxes and insurance affect my payment?
Property taxes and homeowners insurance are typically included in your monthly mortgage payment through an escrow account. Your lender collects these amounts monthly and pays the bills when they're due.
Learn more →Is this calculator free to use?
Yes! Our AI Mortgage Calculator is completely free with no registration required. You can use it as many times as you need to explore different scenarios.
How accurate are the calculations?
Our calculations use standard mortgage formulas and are highly accurate. However, actual payments may vary slightly based on lender-specific fees, exact interest rate calculation methods, and local tax rates.
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