Q: How do I calculate my monthly mortgage payment?

Use the formula M = P × [r(1+r)^n] / [(1+r)^n − 1], where P = loan amount, r = monthly rate (annual rate ÷ 12), n = number of payments (years × 12). For a $320,000 loan at 6.5% for 30 years: r = 0.065/12 = 0.005417, n = 360, M = $2,023/month for P&I only (before taxes and insurance).

Q: What is a good interest rate for a 30-year mortgage in 2026?

As of 2026, 30-year fixed mortgage rates range from 6.0% to 7.5% for qualified borrowers with 20% down and a 740+ credit score. Rates below 6.5% are considered competitive in the current environment. Your rate depends on credit score, loan-to-value ratio, loan type, and market conditions at closing.

Q: How much does PMI cost on a mortgage?

PMI costs 0.3%–1.5% of the loan amount annually. On a $300,000 mortgage, that's $900–$4,500/year ($75–$375/month). The exact rate depends on your credit score (higher score = lower PMI), down payment percentage, and lender. PMI is automatically cancelled when your balance reaches 78% of the original home value.

Q: What is the difference between a 15-year and 30-year mortgage?

On a $300,000 loan at 6.5%: 30-year payment = $1,896/month with total interest = $382,633. 15-year payment = $2,613/month with total interest = $170,178 — saving $212,455 in interest. The 15-year has 38% higher monthly payments but saves 56% on total interest. The 30-year provides cash flow flexibility; the 15-year builds equity faster.

Q: Should I pay points to lower my mortgage rate?

One point = 1% of the loan amount and typically reduces the rate by 0.25%. On a $300,000 loan, one point costs $3,000 and saves $50/month. Break-even = $3,000 ÷ $50 = 60 months (5 years). If you stay in the home longer than the break-even period, paying points makes financial sense.

Q: How much house can I afford on my salary?

The 28/36 rule: housing costs (PITI) should not exceed 28% of gross monthly income, and total debts (housing + car + student loans + credit cards) should not exceed 36%. On $90,000/year ($7,500/month): max housing payment = $2,100. At 6.5% for 30 years, that supports approximately $330,000 in loan (or $413,000 home with 20% down).

Q: What is an ARM vs. a fixed-rate mortgage?

A fixed-rate mortgage keeps the same interest rate for the entire loan term. An adjustable-rate mortgage (ARM) has a fixed period (3, 5, 7, or 10 years) then adjusts annually based on a benchmark index (like SOFR) plus a margin. ARMs start with lower rates — a 5/1 ARM at 5.75% vs. 6.5% fixed saves $125/month initially, but adds risk of rate increases after year 5.

Q: What credit score do I need to qualify for a mortgage?

Conventional loans require a minimum 620 credit score (but 740+ gets the best rates). FHA loans accept 580 with 3.5% down (or 500 with 10% down). VA loans have no official minimum but most lenders require 580–620. Each 20-point credit score improvement can reduce your rate by 0.1–0.2%, saving $15,000–$30,000 over 30 years on a $350,000 loan.

Q: How does a down payment affect my mortgage payment?

A larger down payment reduces your loan amount, eliminates PMI (at 20%+), and may qualify you for a better rate. On a $400,000 home: 5% down ($20,000) → $380,000 loan + PMI ~$237/month. 20% down ($80,000) → $320,000 loan, no PMI. The difference in monthly payment: ~$600/month ($7,200/year). Over 30 years: $86,000+ savings from the larger down payment.

Question 1

What is PITI in a mortgage payment?

Accepted Answer

PITI stands for Principal, Interest, Taxes, and Insurance — the four components of a monthly mortgage payment. Principal reduces your loan balance. Interest is the lender's charge, calculated on the outstanding balance. Taxes are your property tax, collected monthly in escrow and paid annually. Insurance includes homeowner's insurance (mandatory) and PMI (required if down payment < 20%).

Question 2

How do I calculate my monthly mortgage payment?

Accepted Answer

Use the formula M = P × [r(1+r)^n] / [(1+r)^n − 1], where P = loan amount, r = monthly rate (annual rate ÷ 12), n = number of payments (years × 12). For a $320,000 loan at 6.5% for 30 years: r = 0.065/12 = 0.005417, n = 360, M = $2,023/month for P&I only (before taxes and insurance).

Question 3

What is a good interest rate for a 30-year mortgage in 2026?

Accepted Answer

As of 2026, 30-year fixed mortgage rates range from 6.0% to 7.5% for qualified borrowers with 20% down and a 740+ credit score. Rates below 6.5% are considered competitive in the current environment. Your rate depends on credit score, loan-to-value ratio, loan type, and market conditions at closing.

Question 4

How much does PMI cost on a mortgage?

Accepted Answer

PMI costs 0.3%–1.5% of the loan amount annually. On a $300,000 mortgage, that's $900–$4,500/year ($75–$375/month). The exact rate depends on your credit score (higher score = lower PMI), down payment percentage, and lender. PMI is automatically cancelled when your balance reaches 78% of the original home value.

Question 5

What is the difference between a 15-year and 30-year mortgage?

Accepted Answer

On a $300,000 loan at 6.5%: 30-year payment = $1,896/month with total interest = $382,633. 15-year payment = $2,613/month with total interest = $170,178 — saving $212,455 in interest. The 15-year has 38% higher monthly payments but saves 56% on total interest. The 30-year provides cash flow flexibility; the 15-year builds equity faster.

Question 6

Should I pay points to lower my mortgage rate?

Accepted Answer

One point = 1% of the loan amount and typically reduces the rate by 0.25%. On a $300,000 loan, one point costs $3,000 and saves $50/month. Break-even = $3,000 ÷ $50 = 60 months (5 years). If you stay in the home longer than the break-even period, paying points makes financial sense.

Question 7

How much house can I afford on my salary?

Accepted Answer

The 28/36 rule: housing costs (PITI) should not exceed 28% of gross monthly income, and total debts (housing + car + student loans + credit cards) should not exceed 36%. On $90,000/year ($7,500/month): max housing payment = $2,100. At 6.5% for 30 years, that supports approximately $330,000 in loan (or $413,000 home with 20% down).

Question 8

What is an ARM vs. a fixed-rate mortgage?

Accepted Answer

A fixed-rate mortgage keeps the same interest rate for the entire loan term. An adjustable-rate mortgage (ARM) has a fixed period (3, 5, 7, or 10 years) then adjusts annually based on a benchmark index (like SOFR) plus a margin. ARMs start with lower rates — a 5/1 ARM at 5.75% vs. 6.5% fixed saves $125/month initially, but adds risk of rate increases after year 5.

Question 9

What credit score do I need to qualify for a mortgage?

Accepted Answer

Conventional loans require a minimum 620 credit score (but 740+ gets the best rates). FHA loans accept 580 with 3.5% down (or 500 with 10% down). VA loans have no official minimum but most lenders require 580–620. Each 20-point credit score improvement can reduce your rate by 0.1–0.2%, saving $15,000–$30,000 over 30 years on a $350,000 loan.

Question 10

How does a down payment affect my mortgage payment?

Accepted Answer

A larger down payment reduces your loan amount, eliminates PMI (at 20%+), and may qualify you for a better rate. On a $400,000 home: 5% down ($20,000) → $380,000 loan + PMI ~$237/month. 20% down ($80,000) → $320,000 loan, no PMI. The difference in monthly payment: ~$600/month ($7,200/year). Over 30 years: $86,000+ savings from the larger down payment.

Question 11

What are closing costs on a mortgage?

Accepted Answer

Closing costs are 2%–5% of the loan amount, paid at loan settlement. They include: origination fee (0.5–1%), appraisal ($300–$500), title insurance ($700–$1,500), attorney fees (if required by state), prepaid taxes and insurance, and recording fees. On a $350,000 loan: closing costs of 3% = $10,500. Many lenders offer 'no closing cost' mortgages that roll costs into the rate.

Question 12

What happens if I miss a mortgage payment?

Accepted Answer

Most lenders have a 15-day grace period with no penalty. After 15 days, a late fee (typically 3–5% of the payment) is charged. After 30 days, the delinquency is reported to credit bureaus (significant score damage). After 90+ days of missed payments, lenders may begin foreclosure proceedings. During hardship, contact your lender immediately for forbearance or modification options.

Question 13

Is it better to rent or buy a home in 2026?

Accepted Answer

The 5% Rule: if annual rent is less than 5% of the home price, renting may be more financially efficient. At $400,000 home value: 5% = $20,000/year ($1,667/month). If you can rent a comparable home for less than $1,667/month, renting may make sense. Additional factors: how long you plan to stay (breakeven typically 3–5 years), local market appreciation, and the opportunity cost of the down payment.

Question 14

What is mortgage refinancing and when does it make sense?

Accepted Answer

Refinancing replaces your current mortgage with a new loan, typically to get a lower rate, change the term, or access equity (cash-out refinance). It makes sense when: (1) rates drop 0.75–1%+ below your current rate, (2) you plan to stay long enough to recoup closing costs (typically 24–36 months), or (3) you want to switch from ARM to fixed. Closing costs of 2–5% mean the monthly savings must be significant enough to break even.

Question 15

How does property tax affect my mortgage payment?

Accepted Answer

Property taxes are collected by lenders monthly (1/12 of the annual tax bill) and held in escrow until the annual payment is due. Tax rates vary by state: NJ (2.23%) adds $556/month on a $300K home. TX (1.60%) adds $400/month. CA (0.75%) adds $188/month. FL (0.80%) adds $200/month. High property taxes significantly increase PITI beyond just principal and interest.

Metric	Your plan	+1% Interest (7.5%)	+12 Months (372mo)
Monthly EMI	₹2,528	₹2,797 ↑ ₹269	₹2,502 ↓ ₹26
Total Interest	₹5,10,178	₹6,06,869 ↑ ₹96,691	₹5,30,767 ↑ ₹20,589
Total Payable	₹9,10,178	₹10,06,869	₹9,30,767

Factor	30-Year Fixed	15-Year Fixed
Interest rate (typical)	6.50%	5.75%
Monthly P&I ($320K loan)	$2,023	$2,659
Total interest paid	$408,808	$158,574
Interest savings	—	$250,234
Equity at year 5	$17,200	$59,000
Best for	Cash flow priority	Wealth building

Mortgage Calculator

📊 Interactive EMI Breakdown

Principal vs Interest

Year-by-Year Payment Split

Loan Scenario Comparison

📐 How Mortgage is Calculated

Rate Comparison

💡 How Mortgage Payments Are Calculated — The PITI Formula

The Amortization Formula — How Your Mortgage Balance Shrinks

PMI: What It Costs and When It Goes Away

Understanding Mortgage Rate Factors

30-Year vs. 15-Year Mortgage: A Complete Comparison

How Extra Payments Accelerate Mortgage Payoff