Mortgage & Home Buying

What your monthly payment is made of

When lenders quote a monthly payment, they usually mean principal and interest only. Your real cost is PITI: principal, interest, property taxes and homeowners insurance — plus private mortgage insurance (PMI) if your down payment is under 20%, and homeowners association (HOA) dues if the property has them. Taxes and insurance can add several hundred dollars a month, so the real payment is often much higher than the headline figure. Our mortgage calculator adds all of it up.

What decides the rate you get

The rate you are offered depends on your credit score, the size of your down payment (a lower loan-to-value ratio usually means a better rate), the length of the loan — 15-year loans carry lower rates than 30-year loans — and the type of loan. Market conditions set the background: the Freddie Mac weekly survey is the standard benchmark, and you can see the latest reading on our current mortgage rates page. Small differences matter more than they look: on a $300,000 30-year loan, 6.5% costs $1,896 a month in principal and interest while 7.5% costs $2,098 — about $200 a month, or more than $72,000 over the life of the loan.

When refinancing pays off

Refinancing replaces your current mortgage with a new one, usually to get a lower rate or a shorter term. The catch is closing costs — typically 2% to 5% of the loan amount — so the deal only pays if you stay in the home long enough to recover them. Divide your closing costs by your monthly saving to find the break-even point: $6,000 of costs divided by $200 a month saved means you break even after 30 months. If you expect to move before then, refinancing loses money. Also watch the clock: a fresh 30-year loan restarts amortization, so you can pay more total interest even at a lower rate.

How much house can you afford?

Lenders often use the 28/36 rule: spend no more than 28% of your gross monthly income on housing, and keep all debt payments under 36%. Those are ceilings, not targets — a payment that fits the rule can still feel tight once childcare, commuting and everyday costs are counted. A safer test is to live on the new budget for a few months before you buy: if you can set aside the difference between your current rent and the expected payment without strain, the payment is probably realistic.

Mortgage and home buying tools

• Mortgage Calculator — your full monthly payment, including tax, insurance, PMI and HOA.
• Refinance Calculator — see whether a lower rate saves money after closing costs.
• Amortization Schedule Calculator — every payment split into principal and interest, month by month.
• Home Affordability Calculator — how much house your income and debts can support.
• UK Mortgage Calculator — monthly payments plus a Stamp Duty (SDLT) estimate, with first-time buyer relief.

Guides

• How Much House Can I Afford? — work out a realistic price range from your income, debts and deposit.
• Mortgage Payment Breakdown — what principal, interest, tax, insurance and PMI each add to your monthly payment.
• Should I Refinance My Mortgage? — when a lower rate actually saves money after closing costs.

Also useful: our mortgage payment tables show monthly payments at a glance for 30-year loans from $200,000 to $600,000.