Mortgage Rate Calculator
Enter your home price, down payment, interest rate, and loan term to see your monthly principal and interest payment, true annual percentage rate (APR), total interest over the life of the loan, and the complete PITI breakdown including property taxes, insurance, and PMI. An amortization schedule and balance chart update instantly as you type.
How the mortgage rate calculator works
This calculator uses the standard annuity formula to find your monthly principal and interest payment: Monthly P&I = P x r(1+r)^n / ((1+r)^n - 1), where P is the loan principal (home price minus down payment), r is the monthly interest rate (annual rate / 12), and n is the number of monthly payments (years x 12). For example, a 400,000 home with 80,000 down, a 6.75% rate, and a 30-year term gives a principal of 320,000, a monthly rate of 0.5625%, and 360 payments. The result is a monthly P&I payment of about 2,076. The calculator also computes your true APR by finding the discount rate that equates the lender's net disbursement to the present value of all your payments, incorporating points and upfront fees. This is a more accurate cost comparison than the stated rate alone.
Understanding PITI: your real monthly housing cost
Lenders and budgets focus on PITI - Principal, Interest, Taxes, and Insurance - because these four costs together determine your true monthly obligation. Principal and interest form the loan payment itself. Property taxes are collected monthly in escrow by most lenders (typically 1 to 1.5% of home value per year in the US). Homeowners insurance protects the structure and is also usually escrowed (roughly 0.25 to 0.5% of value per year). Private mortgage insurance (PMI) is added when your down payment is below 20% of the purchase price, typically at 0.2 to 1.5% of the loan balance annually, and can be removed once you reach 20% equity. HOA fees apply to condos and planned communities and can range from under 100 to over 1,000 per month. Entering all of these gives you the true cash outflow you need to budget for each month.
Down payment, PMI, and equity
The down payment is the single biggest lever you control at purchase. A larger down payment reduces your loan balance, which lowers your monthly payment and the total interest you pay. More importantly, crossing the 20% threshold eliminates PMI entirely. On a 320,000 loan at 0.5% PMI, that's 133 per month you stop paying once your equity reaches 20%. You typically need to request PMI cancellation when your loan-to-value drops to 80% through payments, or it cancels automatically at 78% under federal law (Homeowners Protection Act). FHA loans require mortgage insurance for the life of the loan unless refinanced, making conventional financing preferable once you can reach 20% down.
Fixed-rate vs adjustable-rate mortgages
A fixed-rate mortgage locks your interest rate and monthly P&I payment for the entire term, providing certainty regardless of market movements. A 30-year fixed is the most common US mortgage. An adjustable-rate mortgage (ARM) carries a lower introductory rate for an initial fixed period (5, 7, or 10 years), then adjusts annually based on a benchmark index plus a margin. A 5/1 ARM is fixed for 5 years, then adjusts once per year. ARMs typically have caps: a periodic cap limiting how much the rate can change in one adjustment, a lifetime cap limiting how far it can move from the initial rate, and a floor it cannot go below. ARMs can save money if you sell or refinance before the fixed period ends, but carry rate risk afterward.
Mortgage type comparison
| Type | Fixed period | Best for | Rate vs 30-yr fixed |
|---|---|---|---|
| 30-year fixed | 30 years | Stability, long-term buyers | Baseline |
| 15-year fixed | 15 years | Faster payoff, lower total interest | Lower by ~0.5-0.75% |
| 5/1 ARM | 5 years | Short-term ownership (<5-7 yrs) | Lower initially |
| 7/1 ARM | 7 years | Medium-term plans | Lower initially |
| 10/1 ARM | 10 years | Longer-term but rate flexibility | Lower initially |
| FHA loan | 15 or 30 years | Low down payment (3.5%), lower credit | Comparable to conventional |
| VA loan | 15 or 30 years | Eligible veterans, no PMI required | Often below market |
| Jumbo loan | 15 or 30 years | Loan amounts above conforming limits | Varies, often higher |
General guidance on common US mortgage structures. Rates and requirements vary by lender and market.
Frequently asked questions
What is the difference between interest rate and APR on a mortgage?
The interest rate is the base cost of borrowing, used to calculate your monthly P&I payment. The APR (annual percentage rate) is a broader measure that includes the interest rate plus fees paid to obtain the loan: origination fees, discount points, mortgage broker fees, and some closing costs. Because fees reduce the net amount you actually receive while your payments stay the same, the APR is always equal to or higher than the stated rate. Use the APR when comparing offers from different lenders, since a loan with a lower rate but high fees may cost more than one with a slightly higher rate and lower fees.
How much does a 1% difference in mortgage rate affect my payment?
On a 300,000, 30-year loan, a 1% rate increase adds roughly 167 per month to your principal and interest payment and about 60,000 more in total interest over the life of the loan. The sensitivity is proportional to loan size: on a 600,000 loan the same 1% difference adds about 334 per month. This is why even small improvements in your credit score or loan terms can generate meaningful savings.
Should I pay mortgage points to get a lower rate?
Discount points make sense when you plan to keep the loan long enough to recoup the upfront cost through lower monthly payments. Each point typically costs 1% of the loan amount and reduces the rate by about 0.125-0.25%. The break-even is calculated by dividing the points cost by the monthly savings. If you pay 3,200 (1 point on a 320,000 loan) and save 40 per month, you break even in 80 months (about 6.7 years). If you expect to sell or refinance before that point, skip the points.
How do I remove PMI from my mortgage?
Under the federal Homeowners Protection Act, lenders must automatically cancel PMI when your loan balance falls to 78% of the original purchase price through scheduled payments. You can request cancellation earlier at 80% LTV if you have a good payment history and, in some cases, a new appraisal showing the home value has not declined. FHA loans originated after June 2013 with less than 10% down carry mortgage insurance for the entire loan term, which is one reason many borrowers refinance into a conventional loan once they reach 20% equity.
What is a conforming loan limit?
The conforming loan limit is the maximum loan amount that Fannie Mae and Freddie Mac will purchase. Loans below this limit are "conforming" and generally carry lower rates because lenders can sell them to the secondary market. Loans above the limit are "jumbo" mortgages, which typically require larger down payments, higher credit scores, and often carry slightly higher rates. The Federal Housing Finance Agency adjusts the limit annually based on home price changes. For 2026 the baseline limit in most US counties is 806,500 for a single-family home.