How the maths works
How to use it
- Enter the home price and your down payment percentage. Watch the PMI line appear the moment you drop below 20%.
- The rate defaults to the current national average 30-year fixed rate. Your actual rate depends heavily on your credit score — the difference between a 620 and a 760 score is frequently more than a full percentage point.
- Set property tax as a percentage of home value. The US average is around 1.1%, but it ranges from roughly 0.3% to over 2% depending on the state.
- Read the full monthly payment, not the principal and interest figure. Tax, insurance and PMI routinely add 25–40% on top.
A worked example
A $400,000 home with 20% down at 6.69% over 30 years: principal and interest is $2,063, but with 1.1% property tax and $1,800 insurance the real payment is $2,579. Drop to 5% down and you add $238 a month in PMI on a larger loan — the payment becomes $3,043, and you pay PMI for years before it falls away automatically.
Where this sits in the Financial Literacy resource
A calculator tells you where you are. It does not tell you what to do next, and a number without a plan behind it tends to produce anxiety rather than progress. These stages are free, need no account, and cover the decision this calculator is measuring.
Common questions
Why do I need 20% down on a house?
Twenty percent is where three things change at once: private mortgage insurance disappears, you begin with real equity instead of owing more than the house is worth after closing costs, and lenders price your rate lower because their risk has fallen. It is not a moral standard — it is the line where the economics change. If it is not realistic right now, FHA loans at 3.5% down, VA loans at 0% down for eligible service members, USDA rural loans and state down-payment assistance programmes all exist, and waiting years to reach 20% while paying rent is sometimes the more expensive choice.
What is PMI and when does it stop?
Private mortgage insurance protects the lender if you default — it buys you nothing. It typically costs 0.5% to 1.5% of the loan each year. Under the Homeowners Protection Act, PMI on most conventional loans terminates automatically once the balance reaches 78% of the original value, and you can request cancellation at 80%. FHA mortgage insurance works differently and often lasts the life of the loan.
How much house can I afford?
The common guideline is housing at or under 28% of gross monthly income, with all debt payments together under 36%. Lenders will frequently approve more than that, because approval is a measure of what you can be made to pay rather than what leaves your life functional. The calculator shows the income the guideline implies for your payment.
What is included in a mortgage payment?
Four things, abbreviated PITI: principal, interest, taxes and insurance — plus HOA fees and PMI where they apply. Quoted mortgage payments often show only principal and interest, which is why buyers are frequently surprised by a payment 25–40% higher than the figure they planned around.
What this calculator is not
It is an educational model, not a projection and certainly not advice. It knows nothing about your income, your state, your debts or your benefits status, and it ignores taxes and fees unless the page says otherwise. If you receive SSI or SSDI some of this maths works differently and getting it wrong can cost you eligibility — start with the Disability Wealth Guide instead. Our sourcing and correction policy is on the editorial standards page.
Nothing here is stored. Every calculation runs in your browser. No numbers are transmitted, logged or saved to any server, and no account is required. Close the tab and it is gone.