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Loan Summary
Understanding your mortgage
Key concepts every homebuyer should know
How Much House Can I Afford?
A common guideline is that your monthly housing costs should not exceed 28% of your gross monthly income. This includes your mortgage payment, property taxes, insurance, and any HOA fees. Lenders also look at your total debt-to-income ratio, which should typically stay below 36%. Use our calculator above to find a comfortable payment range for your budget.
Understanding Your Payment
Your monthly mortgage payment is more than just principal and interest. Property taxes are assessed by your local government and typically escrowed into your payment. Homeowner’s insurance protects your investment. If your down payment is less than 20%, you’ll also pay Private Mortgage Insurance (PMI), which protects the lender and usually costs 0.5%–1% of the loan annually.
Fixed vs. Adjustable Rates
A fixed-rate mortgage locks in your interest rate for the life of the loan, giving you predictable payments. An adjustable-rate mortgage (ARM) offers a lower initial rate that resets periodically based on market conditions. ARMs can be a good choice if you plan to sell or refinance within a few years, while fixed rates provide long-term stability and peace of mind.
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Connect with a local Zipstead agent who can help you find the right home and the right mortgage.