Mortgage Calculator

A mortgage calculator estimates monthly home loan payments using the standard amortization formula: M = P[r(1+r)^n] / [(1+r)^n − 1]. P = principal; r = monthly interest rate; n = total payments. Results include principal, interest, taxes, insurance, and PMI.

M = P × [r(1+r)^n] / [(1+r)^n − 1]. For a $300,000 loan at 5% for 30 years (360 payments), monthly P&I ≈ $1,610 before taxes, insurance, and PMI.

PITI = Principal + Interest + Taxes + Insurance. This is your full monthly housing obligation. Principal reduces loan balance; interest compensates lender; taxes fund local services; insurance covers property and liability.

Private Mortgage Insurance (PMI) protects the lender on conventional loans with down payment <20%. Annual cost: 0.3%–1.5% of loan amount (~$100–$500/month on $400K loan). Cancels automatically at 78% LTV; can be requested at 80%.

Monthly PMI = (Loan Amount × Annual PMI Rate) ÷ 12. Rate depends on credit score, down payment, LTV, loan type, and occupancy. Online PMI calculators model this with credit-tier inputs.

Make 20% down payment. Alternatives: 80-10-10 piggyback loan, lender-paid MI (LPMI), VA loan (eligible veterans), USDA loan, or refinance after reaching 20% equity.

A month-by-month table showing how each payment splits between principal and interest. Early payments are interest-heavy; later payments reduce principal. Reveals total lifetime interest and payoff date.

30-year: lower monthly, more total interest (~$279K on $300K at 5%). 15-year: higher monthly ($2,385 vs. $1,610 at 4.5%), less total interest ($129K). Build equity faster with 15-year.

Fixed-rate: rate and payment stay constant. ARM: fixed for initial period (e.g., 5/1 ARM = fixed 5 years, then adjusts annually). ARMs can rise or fall with market indices after the fixed period.

Fixed for 5 years, adjusts annually thereafter. Rate = Margin + Index (e.g., SOFR). Caps: first adjustment ~2%, subsequent 2%, lifetime 5% above initial. Risk of payment shock after year 5.

Use the 28/36 rule: housing costs ≤ 28% of gross income; total debt ≤ 36%. A home affordability calculator inputs income, debts, down payment, and rate to estimate maximum purchase price.

28% front-end = max for housing costs (PITI). 36% back-end = max for all monthly debts including mortgage. Conventional caps: 36–43%. FHA sometimes allows up to 50% with compensating factors.

Higher scores qualify for lower rates. Fannie Mae LLPA matrix steps at 620, 640, 660, 680, 700, 720, 740. A FICO 740+ pays benchmark rate; a 620 borrower adds 0.40–0.60 points — on $275K, that's $51K+ extra interest over 30 years.

Mid-2026 30-year fixed averages ~6.5%–6.8% APR (NerdWallet July 2026: 6.73%). FHA ~5.4%–5.9%, VA 5.4%–5.7%, 15-year fixed 5.4%–6.1%. February 2026 lows hit ~5.98%.

Minimum conventional: 3–5%. NAR 2025: first-time buyers median 10%; repeat buyers 23%. 20% eliminates PMI. Higher down payments improve LTV and rate pricing. Run a mortgage calculator with multiple scenarios.

Annual Taxes = Assessed Value × Local Millage Rate. Rates: 0.5%–2.5% of assessed value. A $400K home in a 1% zone = $4,000/yr ≈ $333/month. Add to PITI.

Covers dwelling, personal property, liability, and loss-of-use. Typical: $800–$1,500/year for standard homes. Flood/earthquake require separate policies. Advanced calculators use ZIP code for location-based estimates.

HOAs add $200–$600/month on average for condos and planned communities. Include in your PITI model to avoid budget surprises. Some calculators let you input HOA directly into the monthly payment.

A mortgage calculator with term comparison shows side-by-side P&I, total interest, and payoff date. 30-year offers lower payments; 15-year cuts interest and builds equity faster. Run both against your cash flow.

Use the base amortization formula; extra principal payments reduce the outstanding balance, which reduces interest accrual in subsequent months. $100/month extra on $320K saves ~$51,000 and cuts 4.5 years.

1 discount point = 1% of loan amount, typically lowers rate ~0.25%. Break-even = (Points Cost) ÷ (Monthly Savings). Example: 2 points ($6,000) saving $100/month = break-even at 5 years. Stay longer → buy points.

Refinancing replaces an existing mortgage with a new one at a better rate or term. Common triggers: rate drop of 0.5–0.75 points, switching ARM to fixed, or pulling cash from equity. Use a refinance calculator for break-even analysis.

Break-Even (months) = Closing Costs ÷ Monthly Savings. If closing costs are $6,000 and you save $200/month, break-even is 30 months. Only refinance if you plan to stay past break-even.

2%–6% of home price. Includes: loan origination fee (0.5%–1%), appraisal, title insurance, attorney/escrow, prepaid taxes/insurance, and recording fees. On $400K home: budget $8,000–$24,000 plus down payment.

Home Equity = Current Market Value − Remaining Mortgage Balance. Track via amortization schedules or home equity calculators. Reach 20% equity (80% LTV) to remove PMI or qualify for HELOC.

Home Equity Line of Credit = revolving credit line secured by home equity. Borrow as needed during a draw period (typically 10 years). Requires 15–20% equity minimum. Interest-only payments possible during draw.

Home equity loan = one-time lump sum, fixed rate, fixed term. HELOC = revolving line, variable rate, draw + repayment periods. Both require equity. Choose loan for known costs; HELOC for ongoing projects.

LTV = (Loan Amount ÷ Appraised Value) × 100. 20% down = 80% LTV (no PMI). 10% down = 90% LTV (PMI required). Lower LTV means better terms and faster PMI removal.

Any conforming loan above FHFA limits — $832,750 baseline in 2026, $1,249,125 in high-cost areas (SF, NYC, LA, Honolulu, Alaska, Hawaii). Lender-held pricing, stricter underwriting: 700–720+ credit, 10–20% down, 6–12 months reserves.

$832,750 for one-unit properties in most counties. High-cost county ceiling: $1,249,125. High-balance loans sit between these two and remain conforming. Anything above is jumbo.

A conforming loan in a high-cost county between the standard limit ($832,750) and the high-cost limit ($1,249,125). Still sold to Fannie/Freddie but with slightly different pricing.

Government-backed loan requiring 3.5% down (580+ credit) or 10% (500–579 credit). Requires upfront MIP (1.75%) and annual MIP (0.15%–0.75%). MIP lasts for life of loan if <10% down; cancels after 11 years if ≥10% down.

Zero-down, no-PMI loan for eligible veterans, active-duty service members, National Guard/Reserve, and qualifying surviving spouses. Rates 0.25–0.50 points below conventional. One-time funding fee: 1.25%–3.3% (waived for service-connected disability).

Zero-down loan for USDA-eligible rural/suburban areas with income ≤115% of area median. Upfront guarantee fee 1% (financable), annual fee 0.35% on outstanding balance. One of the most underutilized loan programs.

Non-Qualified Mortgage loans that don't meet CFPB Qualified Mortgage rules. Use alternative documentation (bank statements, 1099s, P&L statements). For self-employed or irregular income borrowers. Often higher rate.

Debt-Service Coverage Ratio loan for investment properties. Uses property cash flow rather than borrower income to qualify. DSCR ≥1.20–1.40 required. Popular for real estate investors.

Non-QM loan using 12–24 months of personal or business bank statements to verify income instead of W-2s and tax returns. Higher rate than conforming, no traditional income documentation needed.

Short-term loan to finance new home construction. Interest-only payments during construction. Converts to permanent mortgage upon completion. Typically 6–12 month term with a 20–25% down payment.

Short-term bridge financing to buy a new home before selling the current one. Uses existing home equity. Higher rates and short term (6–12 months). Useful in competitive markets or tight timing situations.

For homeowners 62+. Converts home equity to cash with no monthly payments. Loan repaid when owner sells, moves out, or dies. HECM (FHA-insured) is the most common type. Non-recourse — heirs never owe more than home value.

Refinance for more than current balance and pocket the difference. Uses home equity for debt consolidation, renovations, or investments. Typically 80% LTV max on conventional; higher on VA.

Replaces existing mortgage with new rate and/or term without taking cash out. Used to lower rate, switch ARM to fixed, or remove PMI. Easier to qualify for than cash-out refinance.

Simplified refinance for FHA, VA, and USDA loans with reduced documentation, no appraisal in many cases, and faster underwriting. FHA Streamline, VA IRRRL, and USDA Streamlined Assist are the three main types.

Combines home purchase and renovation costs into one FHA loan. Standard 203(k) for major rehab; limited 203(k) for cosmetic fixes up to $35K. Down payment based on combined purchase + rehab value.

Fannie Mae's conventional version of 203(k). Finances purchase and renovation. 3% minimum down, 620+ credit. More flexible than FHA 203(k) for borrowers with better credit.

Pays only interest for an initial period (5–10 years), then amortizes over the remaining term. Lower payments during IO period, but principal never reduces. Available on some jumbo and ARM products.

26 half-payments per year = 13 full payments. Accelerates payoff by ~4–6 years on a 30-year loan and saves tens of thousands in interest. Some lenders offer this free; others charge setup fees.

Mortgage insurance (PMI/MIP) protects the lender against default. Homeowners insurance protects you against fire, theft, and liability. Both are often escrowed into monthly PITI payments.

FHA MIP: 1.75% upfront + 0.15%–0.75% annual, lasts life of loan if <10% down. Conventional PMI: 0.3%–1.5% annual, cancels at 80% borrower-request or 78% automatic. FHA MIP is harder to remove.

Send written request to servicer when balance reaches 80% of original value (per original amortization schedule). Lender must automatically cancel at 78% if loan is current. Can also request current-value appraisal review if home has appreciated.

At 78% of original value per the original amortization schedule — typically year 5–8 on a 20%-down amortization. Lender must notify borrower; no request needed. Must be current on payments.

Federal law governing PMI cancellation and disclosure. Requires lenders to provide PMI annual statements and cancel automatically at 78% LTV. Borrowers have right to request cancellation at 80%.

FHA MIP doesn't automatically cancel like conventional PMI. If you put down <10%, MIP lasts the loan's life. To remove: refinance into a conventional loan once you reach 20% equity and credit qualifies.

Lender pays PMI upfront or in exchange for a higher interest rate. No monthly PMI payment. Rate is typically 0.25–0.50 percentage points higher. Good if you don't plan to stay long enough to remove borrower-paid PMI.

First mortgage at 80% LTV (no PMI), second mortgage at 10%, and 10% down payment. Second mortgage has higher rate. Eliminates PMI but increases complexity and potential foreclosure risk on the junior lien.

DTI % = (Total Monthly Debt Payments ÷ Gross Monthly Income) × 100. Include: mortgage PITI, car loans, student loans, credit card minimums, personal loans. Conventional max ~43%; FHA up to 50%.

Front-end DTI = housing costs only (PITI ± HOA). Lenders want 28–31%. Back-end DTI = all monthly debt obligations. Lenders want ≤36–43%.

Down payment moves LLPA (Loan-Level Price Adjustment) grid on conventional loans. Moving from 5% to 20% down at FICO 720 saves ~0.25–0.50 points. Larger down + better LTV = better rate tier.

On a $400K loan, 0.5% increase adds ~$200/month P&I and ~$72,000 in total interest over 30 years. Small rate moves create large lifetime cost differences.

APR = interest rate + certain fees (origination, points, some closing costs) expressed as an annualized rate. APR > interest rate. Use APR to compare Loan Estimates across lenders.

CFPB requires standardized Loan Estimate form within 3 business days of application. Compare: loan terms, projected payments, total closing costs, cash to close, and APR side-by-side across 3+ lenders.

Rate lock guarantees your quoted rate for a set period (typically 30–60 days). 90-day locks cost 0.125–0.25 in points. Lock in writing when you have a purchase contract or are ready to refinance.

A float-down option lets you capture a lower rate if market rates fall after locking, for a fee (typically 0.25–0.50 points). One-time use; worth it if rates drop 0.5+ points.

Break-Even Months = (Points Cost) ÷ (Monthly Payment Savings). Example: 2 points = $6,000; saves $150/month = 40 months. Only buy if you'll stay past break-even.

Lender pays closing costs in exchange for a higher rate or rolling fees into the loan balance. Cost-benefit: calculate the rate bump vs. out-of-pocket savings. Break-even often 3–5 years.

Total Cost = (Monthly P&I × n) + Closing Costs + Total Interest. A $300K loan at 6.5% for 30 years costs ~$681K total — roughly double the original principal.

Interest on up to $750K of mortgage debt is deductible (2026 tax code). Itemize if your itemized deductions exceed the standard deduction. Consult a tax professional for personalized advice.

PMI is no longer deductible as of 2026 (provisions expired). Only mortgage interest and property taxes remain deductible for itemizers.

Use a refinance calculator: input current balance, current rate, new rate, new term, and closing costs. Output: new monthly payment, monthly savings, total savings, and break-even timeline.

Typical trigger: new rate 0.5–0.75 points below current. Other triggers: switch ARM to fixed, remove FHA MIP, pull cash for renovations, or shorten term. Ensure you'll stay past break-even point.

Interest on cash-out portion is only deductible if used to buy, build, or substantially improve the home. Interest used for debt consolidation or personal spending is not deductible (post-2017 TCJA rules).

Conventional: typically 80% LTV. VA: up to 100% with full entitlement. FHA cash-out refinances exist but are uncommon due to lifetime MIP.

Typically 15–20% equity minimum, credit score 680+, DTI <43%. HELOC interest rates are tied to prime rate or SOFR, so they fluctuate. Interest-only payments during draw period are common.

Some lenders offer fixed-rate options on HELOC draws — each draw is locked at a fixed rate for its term (e.g., 5–15 years). Hybrid HELOC/HOME EQUITY hybrids blend line flexibility with rate predictability.

Available Equity = (Home Value × Max LTV) − Remaining Mortgage Balance. If home is $500K, mortgage $300K, max LTV 80%: 400K − 300K = $100K available.

Inputs: home value, current mortgage balance, desired loan amount, interest rate, term. Outputs: monthly payment, total interest, amortization schedule. Many mortgage calculator sites offer dedicated HELOC/equity tools.

Unsecured personal loan for renovations — typically higher rate than HELOC but no equity required. Compare total cost: HELOC at 7% vs. personal loan at 12% over 5 years.

FHA: 3.5% down, 580 credit minimum, lifetime MIP if <10% down, 1.75% upfront MIP. Conventional: 3% down possible, 620 credit minimum, cancellable PMI at 80%, no upfront fee. Conventional cheaper long-term if you qualify.

VA: 0% down, no PMI, no official credit minimum (lenders usually 620), rates 0.25–0.50 points below conventional, funding fee 0.5%–3.3%. Conventional: 3%+ down, cancellable PMI, more flexible property types.

USDA: 0% down, income ≤115% area median, must be in eligible rural/suburban area, 1% upfront + 0.35% annual fee. FHA: 3.5% down, no geographic restriction, 1.75% upfront + 0.15–0.75% annual. USDA is cheaper if you qualify.

FHA if credit 580–679, down payment 3.5%, or DTI too high for conventional. Conventional if credit 680+, 5–20% down, want cancellable PMI, or buying condo with non-warrantable status.

Two parts: Upfront MIP = 1.75% of loan (financable into loan). Annual MIP = 0.15%–0.75% of loan balance, divided into monthly payments. Life of loan if <10% down; cancels after 11 years if ≥10% down.

Refinance into a conventional loan once you reach 20% equity and credit qualifies (typically 620+). FHA MIP does not automatically cancel like conventional PMI at 78% LTV.

One-time fee on VA loans: 1.25%–3.3% depending on down payment and first vs. subsequent use. Can be financed into the loan. Waived entirely for veterans with service-connected disabilities.

VA guarantees a portion of the loan — basic entitlement = $36,000; lender typically lends up to 4–5× without down payment. Full entitlement = $144K+ (varies). Above county conforming limit = VA jumbo, no down payment with full entitlement.

No — VA loans are for primary residences only. You can restore entitlement by paying off the first VA loan or requesting a one-time restoration after selling the home. Cannot have two active VA mortgages simultaneously (unless Entitlement allows in high-cost markets with down payment).

Two requirements: (1) Property in USDA-designated eligible rural or suburban area. (2) Household income ≤115% of area median income (~$119,850 for family of 4 in 2026). Income limits vary by county and household size.

USDA uses its own underwriting — typically 29% front-end DTI, 41% back-end. Use a USDA loan calculator with income, debts, location, and interest rate inputs to estimate qualifying amount.

Jumbo = loan amount exceeds FHFA conforming limit ($832,750 baseline in 2026, $1,249,125 high-cost). Jumbo is lender-held, not sold to Fannie/Freddie. Requires 700–720+ credit, 10–20% down, 6–12 months reserves.

In 2026, jumbo rates have compressed to within 0.20–0.50 points of conforming — sometimes below conforming for strong credit profiles. Compare 3+ written quotes; jumbo pricing varies widely by lender.

Available on some 5/6, 7/6, and 10/6 SOFR ARMs, up to $5M at 80% LTV. Interest-only period 10 years; then loan amortizes over remaining 20 years. Higher risk — principal never decreases during IO period.

Uses alternative documentation (bank statements, DSCR, P&L). No ability-to-repay rule compliance required for QM exemption. For self-employed or foreign national buyers who can't document traditional W-2 income.

Jumbo DTI cap is typically 43%, some programs 45–50%. Use a jumbo mortgage calculator with same inputs as conforming plus reserve requirements (6–12 months PITI). Lenders may lend up to $2–5M depending on program.

Loans above $5M, typically $5M–$20M+. Handled by portfolio lenders and private banks. Custom underwriting, significantly higher reserves (12–24 months), and documented net worth requirements.

Current LTV = (Current Loan Balance ÷ Current Appraised Value) × 100. Rate-and-term refinance typically max 95–97% LTV. Cash-out refinance typically max 80% LTV.

An independent appraiser assesses home value for the lender. Fee = $500–$800. Appraisal must meet or exceed purchase price for loan approval. If appraisal comes in low, you can renegotiate price, challenge appraisal, or increase down payment.

Appraisal = lender's opinion of value. Home inspection = buyer's due diligence on condition. Inspector checks structure, systems, and safety. Cost: $300–$600. Not required by lender but highly recommended.

Lender-required account to collect 1/12 of annual property taxes and homeowners insurance each month. Ensures bills are paid on time. Some borrowers opt to self-escrow (pay taxes/insurance directly) but most lenders require it.

Loan Estimate = provided within 3 business days of application; discloses rate, payments, fees, and Cash to Close. Closing Disclosure = provided 3 days before closing; final, legally binding numbers.

Compare to Loan Estimate line by line. Key sections: Loan Terms, Projected Payments, Closing Costs (services borrower did not shop for vs. did shop for). Total Closing Costs and Cash to Close appear on page 2.

Lender's title insurance protects the lender against liens or title defects. Owner's title insurance protects you. Lender's title is almost always required; owner's is optional but recommended for one-time cost at closing.

Required when LTV >80%. Protects lender against default. Cancels at 80% borrower-request or 78% automatic. Avoid by putting 20% down or using piggyback/Veterans benefits.

Total Cost = Down Payment + Closing Costs + (Monthly PITI × months in home) + Maintenance Reserve (1–3% of home value annually) + HOA + Major replacements (roof, HVAC every 15–20 years).

Compares total cost of renting (rent + renter's insurance + opportunity cost on security deposit) vs. buying (PITI + maintenance + opportunity cost on down payment). Run 5–10 year scenarios.

In high-cost cities (NYC, SF, LA), buying is often more expensive than renting after accounting for taxes, insurance, HOA, and opportunity cost. In midwest/south markets, buying can break even in 3–5 years.

Future Value = Down Payment × (1 + Investment Return)^Years. If $80K down earns 7% annually for 5 years = ~$112K. Compare to home appreciation and mortgage interest savings.

Mortgage interest and property taxes are deductible if you itemize. Early in the loan, you pay more interest (bigger deduction). Later, more principal (no deduction). See amortization schedule for year-by-year interest/principal split.

The company you send payments to — may differ from your original lender. Servicer handles escrow, statements, PMI cancellation, and customer service. Loans can be transferred between servicers with notice.

You don't directly choose your servicer — it's assigned at closing. You can refinance with a new lender/servicer to change. Servicing rights are sold on secondary markets; complaints go to CFPB or your attorney general.

Monthly document from servicer showing: principal, interest, escrow (taxes/insurance), PMI, total payment, current balance, YTD interest paid, and transaction history. Review for accuracy.

Review mortgage statement YTD column or use amortization schedule. Multiply current outstanding balance by annual rate, then adjust for month-by-month declining balance.

Letter from servicer showing exact amount to pay off the loan on a specific date — including accrued interest up to that date. Required for refinancing or selling. Valid typically 10–30 days.

Send extra principal payments marked "apply to principal only." Use a mortgage payoff calculator to model extra monthly, annual, or lump sum payments. $200/month extra on $320K saves ~$85K and cuts 7.5 years.

26 half-payments per year = 13 full payments. Saves ~$59K and cuts ~5 years off a 30-year loan. Free DIY: pay monthly plus 1/12 extra each month, or use lender's formal bi-weekly program.

Extra money goes directly to reducing principal. Lower principal = less interest next month. Compound savings accelerate over time. Always specify "principal only" on extra payments; some servicers apply to next month's payment by default.

Use an extra payment calculator. On a $320K loan at 6.15%: $100/month saves ~$51K and cuts 4.5 years. $200/month saves ~$85K and cuts 7.5 years.

Make a large lump-sum principal payment, then "recast" the loan — your monthly payment drops based on the new lower balance, same rate and term. Fee: typically $200–$400. Recast vs. refinance depends on rates and costs.

Permanent change to loan terms (rate, term, or principal) to make payments affordable — typically for borrowers in financial distress. Must demonstrate hardship. Lender approval required. Not the same as forbearance.

Temporary reduction or suspension of payments due to hardship. Forbearance doesn't erase debt — missed payments are typically repaid through a repayment plan, deferral, or modification after the forbearance period.

Selling a home for less than the mortgage balance with lender approval. Stays on credit report ~7 years but is less damaging than foreclosure. Requires proof of hardship (job loss, medical emergency).

Voluntarily transfer property title to lender to avoid foreclosure. Remaining debt may or may not be forgiven depending on state law and loan type. Less credit damage than foreclosure but still severe.

Legal process where lender takes control of property after default (typically 90–180 days past due). Major credit damage (100–160 point drop). Stays on credit report 7 years. Avoid via loan modification, short sale, or deed in lieu.

Chapter 7 may discharge personal liability for Deficiency Judgment but not the mortgage lien. Chapter 13 allows repayment plan. Neither automatically removes the mortgage — you still must pay or lose the home through foreclosure.

If foreclosure sale doesn't cover the mortgage balance, lender may sue for the deficiency. State laws vary — some states prohibit deficiencies on purchase money mortgages (anti-deficiency statutes).

Borrower is not personally liable for deficiency. Common in va and USDA loans and purchase-money mortgages in some states. If foreclosed, lender can only take the property — not sue for shortfall.

Title insurance doesn't prevent foreclosure but protects against title defects that could cloud ownership. Foreclosure purchasers should obtain title insurance to ensure clean title.

Deduction = Mortgage Interest Paid (up to $750K debt limit for loans after 12/15/2017). Use Year-to-Date interest from mortgage statement. File Form 1040 Schedule A if itemizing.

Loans taken out after December 15, 2017: interest on up to $750,000 of acquisition debt is deductible. Pre-2018 loans: $1 million grandfathered. Home equity loan interest only deductible if used to buy, build, or improve the home.

Deduction = Property Taxes Paid during the tax year. Look on Closing Disclosure (prorated) or annual tax bill. Include state/local income taxes and SALT cap: $10K combined deduction limit ($5K if married filing separately).

PMI was deductible through 2020. As of 2026, the PMI deduction has not been extended and is not available. Only mortgage interest and property taxes remain deductible for itemizers.

Like-kind exchange of investment property defers capital gains tax. Must identify replacement property within 45 days and close within 180 days. Does not apply to primary residence.

Single filers: $250K exclusion. Married filing jointly: $500K exclusion. Must have lived in home 2 of last 5 years. Gains above exclusion are taxed at capital gains rates (0%, 15%, or 20%).

Capital Gain = Sale Price − (Purchase Price + Improvements) − Exclusion. Example: bought $300K, sold $600K, $100K improvements, married filing jointly: 600K − (300K + 100K) − 500K = −300K = no tax.

When you refinance, you restart amortization from the new loan amount. If you were 10 years into a 30-year and refinance to another 30-year, you reset to a new 30-year schedule — paying more interest long-term.

Refinance to lower rate or term without taking cash. Replaces existing mortgage with new one at better terms. Closing costs 2–6%. Break-even: Closing Costs ÷ Monthly Savings.

Months to Break Even = Total Closing Costs ÷ Monthly P&I Savings. Example: $6,000 closing costs saving $150/month = 40 months. Only refinance if you'll keep the loan past 40 months.

Inputs: home price, down payment %, interest rate, loan term, property tax rate, homeowners insurance, HOA, PMI%, extras (fees). Compare scenarios: 15 vs. 30 year, 5% vs. 20% down.

=PMT(rate/12, years*12, −loan_amount) + taxes + insurance + PMI. Or: =(loan*(rate/12)*(1+rate/12)^(years*12))/((1+rate/12)^(years*12)−1).

Excel: =IRR(cash_flows) where cash flows include initial investment (negative) and all rental income, expenses, and net sale proceeds over holding period. Compare to required rate of return or cap rate.

Cap Rate % = (Net Operating Income ÷ Current Market Value) × 100. NOI = Rental Income − Operating Expenses (excluding mortgage). Used to compare property values and market cap rate benchmarks.

Cash-on-Cash % = (Annual Pre-Tax Cash Flow ÷ Total Cash Invested) × 100. Cash invested = down payment + closing costs + initial repairs. Key metric for real estate investors using financing.

Rental income should be ≥1% of purchase price for positive cash flow. Example: $200K home should rent for ≥$2,000/month. Rough screening tool; actual viability requires full P&L and mortgage analysis.

More conservative than 1% rule: monthly rent ≥2% of purchase price. Stricter filter but higher cash flow margin. Used in higher-cost markets or for properties with higher maintenance.

Gross Rental Yield = (Annual Rent ÷ Purchase Price) × 100. Net yield subtracts operating expenses from rent. Compare to mortgage rate: if gross yield > rate, positive leverage is possible.

DSCR = Net Operating Income ÷ Annual Debt Service. Lenders want 1.20–1.40x. If NOI is $36K and annual mortgage is $30K: DSCR = 1.20x (minimum threshold met).

Estimates 50% of gross rent goes to operating expenses (excluding mortgage). If rent is $3,000/month, estimate $1,500/month expenses before mortgage payment. Quick cash flow screening.

Leverage = (Property Value ÷ Equity Invested). 20% down = 5:1 leverage. Higher leverage amplifies returns but increases risk of negative equity if prices fall.

Underwater Amount = Loan Balance − Current Home Value. Negative equity occurs when balance exceeds value. Can prevent refinancing or sale without bringing cash to closing.

Sale Proceeds = Sale Price − Closing Costs − Remaining Mortgage Balance. If shortfall exists, lender approval is needed. Deficiency judgment risk varies by state.

Appraisal Gap = Appraised Value − Offer Price. Buyer covers the gap in cash. Example: offer $450K, appraise $430K, gap = $20K buyer must bring to closing.

Earnest money = deposit to show commitment (1–3% of offer price, held in escrow). Down payment = cash at closing toward purchase price. Earnest money applies toward down payment and closing costs.

Closing Costs % = (Total Closing Costs ÷ Loan Amount) × 100. National average: 2–6%. Use a closing cost estimator to break down lender fees, title, escrow, taxes, and insurance.

1 Point = 1% of Loan Amount. Each point typically buys ~0.25% rate reduction. Break-even = Points Cost ÷ Monthly Payment Reduction. Model in a refinance calculator.

LTV = (Loan Amount ÷ Lesser of Purchase Price or Appraised Value) × 100. Appraisal determines value for LTV; if appraisal comes in low, you must increase down payment to meet LTV limits.

Combined LTV = (First Mortgage + Second Mortgage) ÷ Home Value × 100. 80-10-10 = 90% combined LTV. Second mortgage at 10% + first at 80% = 90% total.

Monthly Savings = (Original Payment − New Payment). Lifetime Savings = Monthly Savings × (New Term in months) − Points Cost. If points cost less than lifetime savings, buying points wins.

IRR = Rate at which NPV = 0 considering: down payment, closing costs, monthly payments, tax deductions, maintenance, and net sale proceeds after selling costs. Complex — use rental property or investment calculator.

NOI = Gross Rental Income − Vacancy Loss − Operating Expenses. Operating expenses exclude mortgage, capital expenditures, and depreciation. NOI feeds DSCR, cap rate, and cash-on-cash calculations.

Vacancy Loss = Potential Rent × (1 − Occupancy Rate). If 5% vacancy on $36K/year rent: 36K × 0.05 = $1,800. Subtract from potential gross income to get effective gross income.

OER % = (Operating Expenses ÷ Effective Gross Income) × 100. Benchmarks: multifamily 30–45%, office 35–50%, retail 25–40%. Lower OER = more NOI reaching debt service.

GRM = Property Price ÷ Gross Annual Rent. Lower GRM = potentially better value. A $400K property with $48K annual rent = 8.33 GRM. Compare GRM across similar properties in the market.

Equity Build-Up = Principal Paid + Appreciation. Track via amortization schedule + annual appreciation estimate. Equity build-up is a key return component alongside cash flow and tax benefits.

Annual Depreciation = (Building Value ÷ 27.5 years) for residential. Land value not depreciable. Example: $275K building value ÷ 27.5 = $10K/year paper loss offsetting rental income (consult CPA).

Cost segregation study reclassifies components ( carpet, appliances, lighting) into 5–7 year personal property buckets for accelerated depreciation. Typically increases first-year deductions but requires engineering study.

Boot = Cash or Debt Relief Received in Exchange. Boot is taxable. If you trade a $500K property with $200K mortgage for a $600K property with $300K mortgage: boot = $100K debt reduction = taxable.

Prorate by months owned: (Days Owned ÷ 365) × Total Annual Interest. If you sold in June: (181 ÷ 365) × Annual Interest. Form 1098 from lender shows exact interest paid for tax year.

Seller's Share = (Days Owned in Year ÷ 365) × Annual Tax Bill. Buyer reimburses seller for prepaid taxes covering post-closing period. Closing Disclosure line item: "Taxes" under adjustments.

If your loan has a prepayment penalty: Penalty = % of Remaining Balance or Months of Interest. Common on investment property and some non-QM loans. Check Note and Mortgage documents before paying extra.

YSP = lender compensation for offering a rate above par. Example: par rate is 5.0%; lender offers 5.25%; YSP = 0.25% of loan amount paid by investor to lender. Disclosed on Loan Estimate.

Total Cost = Down Payment + Closing Costs + Total Interest Paid over Life of Loan. A $400K home with 20% down = $80K down + $12K closing + ~$276K interest (6.5%, 30yr) = ~$368K total housing cost.

PMI/MIP is generally not deductible as of 2026. However, mortgage points and some closing costs may be deductible. Consult a tax professional for itemization strategies.

Net Proceeds = Sale Price − (Seller Closing Costs + Remaining Mortgage Balance + Moving Costs). Seller closing costs: 6–10% for realtor, title, transfer taxes, escrow.

Typical: 5–6% of sale price split between listing and buyer's agents. Negotiable. On $400K: 400K × 0.05 = $20K. Some discount brokers charge 1–2%.

Extra payments reduce effective term and interest but keep the same scheduled payment. Recast reduces the scheduled payment after a lump-sum principal payment but keeps the original term. Model both in an amortization calculator.

IRR = (Net Savings − Costs) / Investment on a time-weighted basis. Include: rate savings, term extension costs, tax impact, and closing cost outlay.

Compare extra principal return (mortgage rate, e.g., 6.5%) vs. alternative investment return (S&P 500, ~10% historical). If investments earn more than mortgage rate, mathematically better to invest — but risk and risk tolerance matter.

Run two scenarios: (1) extra $200/month to mortgage; (2) extra $200/month to brokerage account at assumed return. Compare net worth at retirement.

Effective Tax Savings = (Marginal Tax Rate × Mortgage Interest Deduction) − Lost Standard Deduction. If you'd already itemize without mortgage, full interest count counts. If mortgage pushes you over standard, only excess helps.

1 Point ≈ 0.25% Rate Reduction. Break-even = (Point Cost) / (Monthly Payment Savings). If $4,000 saves $50/month = 80 months. Only worth it if staying > 80 months.

Increasing down payment from 10% to 20% costs more upfront but eliminates monthly PMI (~$200–300/month). ROI on the extra 10% = monthly savings / incremental investment. Often 15–25% annualized return.

Opportunity Cost = (Rent Paid) − (Home Appreciation Missed). If rent is $2,500/month, waiting 1 year costs $30K in rent. If home appreciated 5% on $400K = $20K, net cost of waiting = $10K.

Points on a purchase loan are fully deductible in the year paid. Points on a refinance must be amortized over the life of the loan. Tax treatment changed under TCJA — consult CPA.

For original loan: interest = (Months Owned ÷ 12) × Annual Interest. For new loan: interest = (Months After Refi ÷ 12) × New Annual Interest. Total interest in calendar year = sum of both.

Upfront MIP = Loan Amount × 1.75%. If financed into loan: New Loan Balance = Original Loan + Upfront MIP. On $300K: 300K + 5,250 = $305,250.

Monthly MIP = (Loan Balance × Annual MIP Rate) ÷ 12. Rate depends on LTV and term: 0.15% (10+% down) to 0.75% (<10% down). On $300K at 0.55%: (300K × 0.0055) ÷ 12 = $137.50/month.

Purchase: 1.25% first use, 1.65% subsequent use, 3.3% for 0% down. Refinance (IRRRL): 0.50%. Cash-out refinance: up to 3.6%. Fee is financable into loan. Waived for service-connected disability.

Upfront guarantee fee = 1% of loan (financable). Annual fee = 0.35% of remaining balance, divided monthly. On $200K: upfront $2,000 + annual $700 ($58/month first year).

Use Closing Disclosure: Loan Costs (origination, underwriting, processing, appraisal, credit, flood, tax service, title, attorney) + Taxes + Prepaids + Reserves.

Prepaids: 1st month's PITI, per-diem interest from closing to month-end, hazard insurance premium (6–12 months), property taxes (6–12 months). Reserves: lender-required cash remaining after closing (1–3 months PITI).

Per-Diem Interest = (Loan Amount × Annual Rate) ÷ 365. On $300K at 6.5%: (300K × 0.065) ÷ 365 ≈ $53.42/day. Multiply by days from closing to month-end.

Varies by state/county. Example: $400K sale, $1 per $1,000 transfer tax = $400. Some states have graduated rates. Check local assessor or title company for exact amount.

Typically: (Loan Amount × Lender's Title Rate) + (Property Value × Owner's Title Rate). Example: $400K purchase, lender policy $400K at $2/1K = $800; owner policy $400K at $3/1K = $1,200. Total = $2,000.

Some HOAs charge transfer fee ($200–$500) at sale. Required reserve contribution (2–6 months HOA dues) may also be due from seller. Check CC&Rs for specific amounts.

No loan fees, but still pay: title insurance, escrow/attorney, transfer taxes, recording fees, appraisal (optional), inspection, and potentially seller concessions. Total typically $4,000–$8,000 on $400K purchase.

Seller may contribute to buyer's closing costs up to limits. Conventional: 3–9% depending on down payment. FHA: 6%. VA: 4%. Concession = Sale Price × Max Concession %. Example: $400K × 6% = $24K max contribution.

Input: home price, down payment ($ or %), interest rate, loan term, property tax rate ($ or %), homeowners insurance ($ or %), HOA fees, PMI rate, ZIP code for location-based tax/insurance estimates. Output: monthly PITI + amortization schedule.

TIP % = (Total Interest Paid ÷ Loan Amount) × 100. On a $300K loan at 6.5% for 30 years: total interest ≈ $381K. TIP = (381K ÷ 300K) × 100 = 127% — you pay 127% of the loan in interest alone.

Use mortgage calculator. 30-year: lower payment, more total interest. 15-year: higher payment, less total interest. On $300K at 6.5%: 30yr = $1,896/month; 15yr = $2,598/month. Difference = $702/month.

Total Paid = Monthly P&I × Number of Payments. On 30-year $300K at 6.5%: 1,896 × 360 = $682,560. Subtract principal ($300K) to get total interest: ~$382K.

Run base amortization, then model extra payments. Savings = (Base Schedule Interest − Accelerated Schedule Interest) − Extra Payments Made. Online mortgage payoff calculators automate this.

Monthly: 12 payments/year. Bi-weekly: 26 half-payments = 13 full payments/year. Extra payment per year reduces principal faster. On $320K at 6.15%: saves ~$59K and cuts 5 years off.

After lump-sum principal payment, recast recalculates monthly payment based on lower balance, same rate and term. Savings = (Old Payment − New Payment) × Remaining Months. Fee: $200–$400.

NPV = −Down Payment − Closing Costs − ΣMortgage Payments + ΣRent Saved + ΣTax Benefits + Sale Proceeds at end. Discount at your required rate of return. Complex — use a rent vs. buy calculator.

Cash flows: −Down Payment − Closing Costs − Mortgage Payments × Years + Appreciation at Sale + Tax Deductions. IRR is the discount rate where NPV = 0. Use Excel =IRR().

Total PMI = Monthly PMI × Months Paid. If PMI is $200/month and you pay 60 months: total = $12,000. Compare to cost of increasing down payment to avoid PMI.

Extra Down Payment Needed to Avoid PMI = 20% of Home Value − Current Down Payment. Compute monthly PMI savings. ROI = (Annual PMI Savings ÷ Extra Down Payment) × 100. Often 15–20% annualized — very high return.

If PMI is $200/month and you pay for 30 more months before automatic 78% cancellation: cost = $6,000. If a $4,000 appraisal-based removal request can eliminate PMI 2 years earlier, net benefit = $4,000 in PMI saved − $400 appraisal fee = $3,600.

Current Equity = (Current Home Value − Remaining Loan Balance) ÷ Current Home Value. If home valued $500K and balance is $380K: (500K − 380K) ÷ 500K = 24% equity. Below 20% = not yet eligible.

FHA Streamline does not require new appraisal. LTV is based on original or current value. Must be "net tangible benefit" — rate drop of ≥0.25% or switch from ARM to fixed.

Monthly Savings = Current VA Payment − New VA Payment. Break-Even = Closing Costs ÷ Monthly Savings. IRRRL typically has no appraisal and lower closing costs than standard refinance.

Run identical inputs (price, down payment, credit, term) in both calculators. Jumbo rate typically 0.20–0.50 points above conforming as of 2026. On $1M loan: 0.25% difference = $166/month, $60K over 30 years.

Discount points prepay interest at closing. 1 Point = 1% of Loan = ~0.25% Rate Reduction. Break-even = (Point Cost) ÷ (Monthly Payment Savings). 2 points ($8K) saving $150/mo = break-even at 53 months.

Locks typically 30–60 days. Extending beyond lock period costs 0.125–0.25 points per 15 days or flat fee ($200–$500). Model in closing cost estimator for long build projects.

Annual escrow analysis by servicer. If actual taxes/insurance exceed projected: shortage. Options: lump-sum payment or monthly payment spread over 12 months. Surplus over $50 is refunded.

Federal law (RESPA) allows servicer to maintain cushion of up to 1/6 of total annual escrow disbursements (~2 months PITI). Cushion appears as part of required reserves at closing.

Extra principal payment of $X applied today: Interest Savings = X × (Annual Rate) × (Months Remaining ÷ 12). Add compound interest on interest avoided. Online calculators give precise figures.

No. This Mortgage Calculator is designed for educational and planning purposes only. It is not financial advice. Always consult with a certified financial planner, CPA, or bank advisor before making decisions regarding mortgage calculator.

The calculator uses standard financial formulas. While the math is accurate, real-world institutions may apply different fees, rounding methods, or calculation approaches. Use results as estimates, not guarantees.

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