Question 1

How do I calculate my mortgage payment?

Accepted Answer

Your monthly mortgage payment is calculated using the formula M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is your loan amount (home price minus down payment), r is your monthly interest rate (annual rate ÷ 12), and n is the total number of months. Add property taxes, homeowner's insurance, and PMI (if applicable) to get your full PITI payment. Our free mortgage calculator does all of this automatically.

Question 2

What is PMI and when do I need it?

Accepted Answer

PMI (Private Mortgage Insurance) is a fee lenders charge when your down payment is less than 20% of the home's value. It protects the lender — not you — if you default on the loan. PMI typically costs between 0.3% and 1.5% of the original loan amount per year. You can usually request PMI removal once you reach 20% equity, and lenders are required to cancel it automatically at 22% equity.

Question 3

Should I choose a 15-year or 30-year mortgage?

Accepted Answer

A 15-year mortgage has higher monthly payments but you pay far less interest overall and own your home twice as fast. A 30-year mortgage has lower monthly payments giving you more cash flow flexibility, but you pay significantly more interest over the life of the loan. Choose 15 years if you can comfortably afford the higher payment; choose 30 years if you want lower payments or plan to invest the difference.

Question 4

How does down payment affect monthly payment?

Accepted Answer

A larger down payment reduces your loan amount, which directly lowers your monthly principal & interest payment. It also helps you avoid PMI (if you reach 20%), often qualifies you for better interest rates, and reduces the total interest paid over the life of the loan. For example, on a $400,000 home, increasing your down payment from 5% to 20% can save you $200+ per month and tens of thousands in total interest.

Question 5

What credit score do I need for a mortgage?

Accepted Answer

Most conventional loans require a minimum credit score of 620, while FHA loans accept scores as low as 580 (or 500 with a 10% down payment). VA and USDA loans typically require 620+. To qualify for the best interest rates, aim for a credit score of 740 or higher.

Question 6

How much house can I afford on an $80,000 salary?

Accepted Answer

A common rule of thumb is the 28/36 rule: spend no more than 28% of your gross monthly income on housing and 36% on total debt. On an $80,000 salary (~$6,667/month), that's about $1,867/month for housing — typically supporting a home priced between $250,000 and $320,000.

Year	Principal Paid	Interest Paid	Remaining Balance
1	$3,410	$21,496	$316,590
2	$3,648	$21,258	$312,942
3	$3,902	$21,004	$309,040
4	$4,174	$20,733	$304,866
5	$4,464	$20,442	$300,402
6	$4,775	$20,131	$295,627
7	$5,107	$19,799	$290,520
8	$5,463	$19,443	$285,057
9	$5,843	$19,063	$279,213
10	$6,250	$18,656	$272,963
11	$6,685	$18,221	$266,278
12	$7,151	$17,755	$259,127
13	$7,649	$17,257	$251,478
14	$8,181	$16,725	$243,296
15	$8,751	$16,155	$234,545
16	$9,360	$15,546	$225,185
17	$10,012	$14,894	$215,173
18	$10,709	$14,197	$204,463
19	$11,455	$13,451	$193,008
20	$12,253	$12,654	$180,756
21	$13,106	$11,800	$167,650
22	$14,018	$10,888	$153,632
23	$14,994	$9,912	$138,638
24	$16,038	$8,868	$122,600
25	$17,155	$7,751	$105,445
26	$18,349	$6,557	$87,095
27	$19,627	$5,279	$67,468
28	$20,994	$3,912	$46,474
29	$22,455	$2,451	$24,019
30	$24,019	$887	$0

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Frequently Asked Questions

How do I calculate my mortgage payment?

What is PMI and when do I need it?

Should I choose a 15-year or 30-year mortgage?

How does down payment affect monthly payment?

What credit score do I need for a mortgage?

How much house can I afford on an $80,000 salary?

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