Estimate your monthly mortgage payment by entering the home price, down payment, mortgage rate, and loan term. See a full breakdown of principal, interest, taxes, and insurance.
Understanding your monthly mortgage payment is essential before making the biggest financial decision of your life. The numbers can be surprising — on a $400,000 home with 10% down at today’s mortgage rates, you’re looking at roughly $2,400/month for principal and interest alone. Add property taxes, homeowner’s insurance, and potentially private mortgage insurance (PMI), and the true cost becomes clearer.
Whether you’re a first-time buyer or looking to upgrade, this calculator helps you understand exactly what you’ll pay each month — and whether you can actually afford the home you want.
How to Calculate Your Monthly Mortgage Payment
Your monthly mortgage payment is made up of several components, often referred to as PITI: Principal, Interest, Taxes, and Insurance. Understanding each part helps you budget accurately and compare different home purchase scenarios.
- Principal: The portion of your payment that reduces the loan balance — this builds your home equity
- Interest: The cost of borrowing, determined by your mortgage rate and remaining balance
- Property Taxes: Typically collected monthly by your lender and held in escrow; varies dramatically by state (see property tax rates by state)
- Homeowners Insurance: Required by lenders to protect the property; averages around $1,500-$2,500/year (insurance costs by state)
If your down payment is less than 20%, you’ll also pay Private Mortgage Insurance (PMI), typically 0.5%-1% of the loan amount annually. PMI protects the lender, not you, and can add $100-$300/month to your payment.
What is the Average Mortgage Payment in the US?
The average mortgage payment in the US is approximately $1,869 per month across all outstanding residential mortgages. However, this figure includes mortgages originated years ago at lower rates. If you were purchasing the median-priced home today ($420,800) with current rates, your payment would be significantly higher — around $2,400-$2,800 depending on your down payment and local taxes.
For context, the median household income is about $85,255/year, or $7,105/month. A $2,500 mortgage payment would consume 35% of gross income — above the recommended 28% threshold that lenders prefer.
How Mortgage Rates Affect Your Payment
Mortgage rates have a dramatic impact on your monthly payment and total cost of homeownership. On a $400,000 home with 10% down ($360,000 mortgage) over 30 years:
| Mortgage Rate | Monthly P&I | Total Interest Paid | Total Cost |
|---|---|---|---|
| 5.0% | $1,933 | $335,740 | $695,740 |
| 6.0% | $2,158 | $416,840 | $776,840 |
| 7.0% | $2,395 | $502,057 | $862,057 |
| 8.0% | $2,642 | $591,010 | $951,010 |
Key insight: A 1% increase in your mortgage rate adds roughly $250/month and over $80,000 in total interest over the life of the loan. This is why even small rate differences matter significantly. See how rates have moved over time on our mortgage rate history page.
The difference between 5% (available in 2021) and 7% (typical in 2024) is $462/month — or $166,317 over 30 years. This rate environment has contributed heavily to the housing affordability crisis and widened the mortgage affordability gap.
Down Payment and Your Monthly Payment
The size of your down payment directly affects both your monthly payment and whether you’ll need to pay private mortgage insurance (PMI). On a $400,000 home at 7%:
| Down Payment | Loan Amount | Monthly P&I | PMI (Est.) | Total Monthly | PMI Required? |
|---|---|---|---|---|---|
| 3% ($12,000) | $388,000 | $2,581 | ~$160 | $2,741 | Yes |
| 5% ($20,000) | $380,000 | $2,528 | ~$155 | $2,683 | Yes |
| 10% ($40,000) | $360,000 | $2,395 | ~$150 | $2,545 | Yes |
| 20% ($80,000) | $320,000 | $2,129 | $0 | $2,129 | No |
PMI typically costs between 0.5% and 1% of the loan amount annually and is required on conventional loans with less than 20% down. Once you reach 20% equity, you can request PMI removal. Learn more about typical down payments on our average down payment page.
The tradeoff: A 20% down payment on a $400,000 home is $80,000 — a significant sum that could take years to save. Many buyers opt for lower down payments to enter the market sooner, accepting the higher monthly cost. For help deciding, see our renting vs buying analysis.
Minimum Down Payments by Loan Type
Different loan programs have different down payment requirements:
| Loan Type | Minimum Down Payment | Credit Score Needed | Best For |
|---|---|---|---|
| Conventional | 3% | 620+ (740+ for best rates) | Good credit, 20% PMI removal |
| FHA | 3.5% (credit 580+); 10% (credit 500-579) | 500+ | Lower credit scores, first-time buyers |
| VA | 0% | No minimum (lender-specific) | Veterans, active military |
| USDA | 0% | 640+ (typically) | Rural area homebuyers |
| Jumbo | 5-20% | 700+ | High-priced homes above conforming limits |
Your credit score significantly impacts not just approval odds but also the rate you receive. A score of 760+ typically qualifies for the best rates, while scores below 680 may add 0.5%-1% to your rate — costing thousands over the loan’s life.
15-Year vs. 30-Year Mortgage: Which Is Right for You?
Choosing a shorter loan term increases your monthly payment but saves substantially on interest. On a $360,000 mortgage at 7%:
| Loan Term | Monthly P&I | Total Interest Paid | Total Cost | Interest Saved vs 30yr |
|---|---|---|---|---|
| 10 years | $4,181 | $141,765 | $501,765 | $360,292 |
| 15 years | $3,235 | $222,329 | $582,329 | $279,728 |
| 20 years | $2,790 | $309,632 | $669,632 | $192,425 |
| 30 years | $2,395 | $502,057 | $862,057 | — |
A 15-year mortgage saves nearly $280,000 in interest but requires $840 more per month. If you can afford the higher payment while still contributing to retirement accounts and maintaining an emergency fund, the 15-year option builds wealth faster.
Alternative strategy: Take a 30-year mortgage but make extra principal payments when you can. This gives flexibility to reduce payments during tough times while still paying down the mortgage faster when cash flow permits.
What Are Closing Costs and How Do They Affect Your Budget?
Beyond the down payment, you’ll need cash for closing costs, which typically run 2-5% of the home price. On a $400,000 home, expect $8,000-$20,000 in:
- Lender fees: Origination, underwriting, processing
- Title and escrow: Title search, title insurance, escrow fees
- Prepaid items: Property taxes, homeowner’s insurance, prepaid interest
- Government fees: Recording fees, transfer taxes
Some buyers negotiate seller credits to cover closing costs, especially in buyer-friendly markets. Others roll closing costs into the loan (increasing the mortgage amount) or receive credits from their lender in exchange for a slightly higher rate.
How Extra Payments Reduce Your Mortgage Cost
Making extra payments toward principal can dramatically reduce your total interest and loan term:
| Extra Payment Strategy | Years to Pay Off | Interest Saved | Time Saved |
|---|---|---|---|
| Standard payments | 30 years | $502,057 | — |
| Extra $100/month | 25.5 years | $81,417 | 4.5 years |
| Extra $200/month | 22.5 years | $132,412 | 7.5 years |
| Extra $500/month | 17 years | $220,587 | 13 years |
| One extra payment/year | 25 years | $73,827 | 5 years |
Based on $360,000 mortgage at 7% over 30 years
Even small extra payments add up significantly through compound interest savings. A popular strategy is making one extra payment per year by splitting your monthly payment in half and paying bi-weekly (26 half-payments = 13 full payments).
Frequently Asked Questions
What is included in a mortgage payment?
A typical mortgage payment includes principal (paying down the loan), interest (the lender’s charge for borrowing), property taxes, and homeowners insurance. If your down payment was less than 20%, private mortgage insurance (PMI) is also included. These components are often called “PITI.” Property taxes and insurance vary significantly by location — see property taxes by state and home insurance by state.
How much house can I afford on a $100,000 salary?
Using the 28% rule, your maximum monthly housing payment would be $2,333. At a 7% rate with 10% down, this could afford a home around $320,000-$350,000 depending on taxes and insurance in your area. Use our mortgage affordability calculator for a personalized estimate based on your specific situation, including existing debts.
Should I make extra mortgage payments?
Making even small extra payments toward principal can significantly reduce your total interest and shorten your loan term. An extra $200/month on a $360,000 mortgage at 7% could save over $132,000 in interest and pay off your home nearly 7.5 years early. However, if you have higher-interest debt like credit cards (averaging 20%+ APR), pay those off first before making extra mortgage payments.
What’s better: a bigger down payment or a lower interest rate?
Generally, a lower interest rate saves more money over the life of the loan. A 0.5% lower rate saves more than an extra 5% down payment on most mortgages. However, reaching 20% down eliminates PMI, which can save $100-$300/month. The best approach depends on your specific numbers — use this calculator to compare scenarios.