Use the interactive calculator below to model your specific mortgage scenario. Adjust the sliders in real time to see how each variable impacts your monthly payment and lifetime interest cost.
Mortgage Calculator
Calculate your monthly payments and total interest.
2026 Mortgage Rate Landscape
Mortgage rates in the United States have moderated from the peak of 8.0%+ seen in late 2023, but remain elevated relative to the historically low rates of 2020–2021. As of mid-2026, the following rate ranges are typical for well-qualified buyers:
| Loan Type | Rate Range (2026) | Best For |
|---|---|---|
| 30-Year Fixed | 6.25% – 7.10% | Long-term stability |
| 15-Year Fixed | 5.60% – 6.30% | Faster payoff, lower interest |
| 7/1 ARM | 5.80% – 6.40% | Selling/refinancing within 7 years |
| 5/1 ARM | 5.50% – 6.10% | Shorter holding periods |
| FHA 30-Year | 6.10% – 6.90% | Low down payment (3.5%) |
Note: Rates vary by credit score, loan size, lender, and market conditions. Always get at least 3 lender quotes.
How to Calculate Your Mortgage Payment
Understanding Your Monthly Mortgage Payment (PITI)
The calculator above shows your Principal and Interest (P&I) payment. Your actual monthly housing cost includes two additional components, collectively abbreviated PITI:
- P — Principal (pays down loan balance)
- I — Interest (cost of borrowing)
- T — Taxes (property taxes, held in escrow by lender)
- I — Insurance (homeowners insurance + PMI if applicable)
Property taxes vary enormously by location — from 0.3% of home value annually in Hawaii to 2.4% in New Jersey. For a $400,000 home in a 1.2% property tax state, that's $4,800/year ($400/month) added to your PITI.
PMI (Private Mortgage Insurance) is required when your down payment is below 20% of the home price. PMI typically costs 0.5%–1.5% of the loan amount annually. On a $320,000 loan (20% down on $400K home), PMI at 1% = $3,200/year ($267/month). PMI is canceled once your equity reaches 20% of the original purchase price.
The Down Payment Decision
The calculator makes clear how dramatically down payment size affects your monthly payment. But the down payment decision is more nuanced than "more is better."
The 20% Threshold
The 20% down payment is significant for two reasons:
- You avoid PMI (typically $100–$300/month on a median-priced home)
- Lenders typically offer marginally better interest rates
But 20% is not a universal requirement. Many buyers are better served by:
- Putting down 10% and keeping a larger emergency fund
- Using an FHA loan (3.5% down) if PMI cost is offset by building equity sooner in an appreciating market
- Using a physician loan (0% down) if you're a high-income professional who would otherwise drain savings
Opportunity Cost of a Larger Down Payment
$80,000 used as a down payment vs. invested in a diversified portfolio earning 8% annually over 30 years = approximately $805,000. This doesn't mean you shouldn't put down 20% — it means the decision requires comparing your mortgage interest rate against your expected investment return, after taxes.
At 6.5% mortgage rate: if your expected after-tax investment return exceeds 6.5%, the math may favor a smaller down payment and investing the remainder.
15-Year vs 30-Year Mortgage: The Real Numbers
Adjust the loan term in the calculator above and watch the total interest figure. The difference is dramatic.
On a $320,000 loan:
| Term | Monthly P&I | Total Interest Paid | Total Paid |
|---|---|---|---|
| 30-Year at 6.5% | $2,023 | $408,280 | $728,280 |
| 15-Year at 6.0% | $2,703 | $166,580 | $486,580 |
The 15-year mortgage results in $241,700 less interest paid. The trade-off: $680/month higher payment that must remain comfortable even in a worst-case income scenario (job loss, medical emergency, market downturn).
The conventional wisdom is: if you can comfortably afford the 15-year payment on one income (not both spouses' combined), the 15-year term is excellent. If the payment is tight, the 30-year mortgage with voluntary extra principal payments (when finances allow) provides more flexibility.
How to Get the Best Mortgage Rate
Your interest rate is not fixed — it varies based on:
- Credit score: 760+ typically qualifies for the best rates. Below 680, rates increase significantly.
- Loan-to-value ratio: Larger down payments = better rates.
- Loan size: Conforming loan limits (under $766,550 in 2026 for most areas) get better rates than jumbo loans.
- Debt-to-income ratio: Lenders want your total monthly debt payments (including the new mortgage) below 43% of gross income.
- Points: You can pay "points" upfront (1% of loan amount each) to reduce the interest rate. Run the break-even calculation: divide the upfront cost by the monthly savings to find the break-even month.
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FAQ
How much house can I afford?
The traditional rule: housing costs (PITI) should not exceed 28% of gross monthly income, and total debt (including auto loans, student loans) should not exceed 36%. A household earning $120,000/year has $3,360/month available for PITI under the 28% rule. At current rates, that supports a mortgage of approximately $480,000–$520,000 with 20% down.
Does getting pre-approved hurt my credit score?
A mortgage pre-approval requires a hard credit inquiry, which temporarily reduces your score by 2–5 points. However, multiple mortgage inquiries within a 30–45 day window are treated as a single inquiry by the FICO scoring model (rate shopping protection). Get all your pre-approvals within the same window.
Should I lock my mortgage rate?
A rate lock freezes your interest rate for 30–60 days (sometimes 90) while your loan closes. Given that rates can move 0.25%+ in a matter of weeks, locking once you're in contract is almost always advisable. Ask your lender about float-down options (the ability to drop to a lower rate if rates fall after locking).
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