How to Calculate Your Mortgage Payment
Your monthly mortgage payment has four components — commonly called PITI: Principal, Interest, Tax, and Insurance. The P&I portion is fixed for the life of a fixed-rate mortgage. Tax and insurance are estimates that can change annually.
⚡ Mortgage Quick Reference — 2026
Average 30-year fixed rate (2026)6.5–7.5%
Average 15-year fixed rate (2026)5.8–6.8%
Max mortgage payment (28% rule)28% of gross monthly income
Min credit score (conventional)620+
Down payment to avoid PMI20%+
30yr vs 15yr interest savings~$200,000 on $300K loan
$100K salary max home price (28%)~$420,000
The Mortgage Formula
30-Year vs 15-Year Mortgage
On a $300,000 loan at 6.8%:
- 30-year: $1,953/month · $402,935 total interest · builds equity slowly
- 15-year: $2,666/month · $179,796 total interest · saves $223,139
- The extra $713/month for the 15-year saves over $220,000 in interest
- If you can invest the difference at 7%+ returns, the 30-year may win mathematically
How Much House Can You Afford by Salary?
Using the 28% front-end DTI rule at 6.8% rate, 30-year term, and 10% down:
| Salary | Max Payment | Max Loan | Max Home Price |
|---|
| $60,000 | $1,400/mo | ~$210,000 | ~$233,000 |
| $80,000 | $1,867/mo | ~$280,000 | ~$311,000 |
| $100,000 | $2,333/mo | ~$350,000 | ~$389,000 |
| $120,000 | $2,800/mo | ~$419,000 | ~$465,000 |
| $150,000 | $3,500/mo | ~$524,000 | ~$582,000 |
PMI: Cost, When You Pay It, How to Avoid It
PMI (Private Mortgage Insurance) protects the lender if you default — not you. Required on conventional loans with less than 20% down.
- Cost: 0.5–1.5% of the loan per year. On a $350,000 loan: $146–$438/month added to your payment
- Duration: Until you reach 20% equity. At 22%, it's automatically removed
- FHA alternative: FHA loans replace PMI with MIP which lasts the life of the loan if down payment is under 10%
- Piggyback loans: An 80-10-10 loan (80% first mortgage, 10% second, 10% cash) avoids PMI without 20% down
Does this calculator include PMI?+
No — PMI is not included. It's required when your down payment is below 20% and typically adds $133–$400/month on a $320,000 loan (0.5–1.5% annually). Once your equity reaches 20%, request cancellation; at 22%, it's automatically removed.
What is a good mortgage rate in 2026?+
In 2026, average 30-year fixed rates are 6.5–7.5%. Borrowers with 760+ credit scores and 20%+ down payments typically get rates 0.5–1% below average. A rate below 7% is considered good in the current environment.
What is an amortization schedule?+
An amortization schedule shows exactly how each payment is divided between principal and interest over the loan's life. In year 1 of a 30-year mortgage, roughly 80% of each payment goes to interest. By year 25, most goes to principal. This is why refinancing in the final years rarely makes sense — you've already paid most of the interest.
How do extra payments affect my mortgage?+
Making one extra monthly payment per year can cut a 30-year mortgage by 4–5 years. On a $300,000 loan at 6.8%, one extra annual payment of $1,953 saves approximately $60,000 in interest and pays off the loan ~5 years early. Apply extra payments directly to principal — specify this with your lender.
Should I refinance my mortgage in 2026?+
Refinancing makes sense when you can lower your rate by at least 0.75–1% and plan to stay long enough to recoup closing costs (typically $3,000–$6,000). Break-even is usually 2–4 years. If 2026 rates drop to 5.5–6% and you have a 7%+ rate, refinancing likely makes sense.