Mortgage Calculator

Calculate your monthly payment and see the complete amortization schedule

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Loan Details

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$80,000 (20%)
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Understanding Your Mortgage

Make informed decisions about the biggest purchase of your life with our comprehensive mortgage guide.

📊 How Mortgages Work

A mortgage is a loan used to purchase real estate. You'll pay back the loan amount (principal) plus interest over a set period. In the early years, most of your payment goes toward interest, but this shifts toward principal over time.

Key Components:
  • Principal: Amount borrowed
  • Interest: Cost of borrowing
  • Term: Length of loan
  • Down payment: Initial payment

💡 Smart Mortgage Tips

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    20% Down = No PMI: Avoid private mortgage insurance
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    Shop Around: 0.5% rate difference saves thousands
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    Extra Payments: One extra payment/year saves years
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    28/36 Rule: Keep housing costs under 28% of income

🏦 Types of Mortgages

Fixed-Rate

Same rate for entire loan term. Predictable payments.

Adjustable-Rate (ARM)

Rate changes after initial period. Lower starting rate.

FHA Loan

Lower down payment (3.5%). Good for first-time buyers.

VA Loan

No down payment for eligible veterans. No PMI.

📈 Building Equity Faster

Accelerate your path to homeownership:

  • Bi-weekly payments = 13 payments/year
  • Round up payments to nearest $100
  • Apply windfalls to principal
  • Refinance when rates drop 1%+
  • Make one extra payment annually

⚠️ Common Mistakes to Avoid

  • ❌ Buying more house than you can afford
  • ❌ Ignoring closing costs (2-5% of home price)
  • ❌ Not shopping for best rates
  • ❌ Skipping home inspection
  • ❌ Forgetting about maintenance costs

🎯 Affordability Guidelines

28%
Maximum housing expense ratio
36%
Maximum total debt ratio

Lenders typically want your monthly housing costs below 28% of gross income and total debt below 36%.