US Mortgage Calculator

The Formula — Standard Monthly Compounding

US mortgages use standard monthly compounding. Your monthly principal and interest payment is calculated as:

Where P is the loan principal, r is the monthly rate (annual rate ÷ 12), and n is the total number of monthly payments (loan term × 12).

Each monthly payment covers accrued interest first; the remainder reduces your principal. In the early years of a 30-year mortgage, roughly 75–80% of each payment goes toward interest. By the final years, nearly all of each payment is principal. This front-loading of interest is why making extra payments early has an outsized impact on total interest paid.

Private Mortgage Insurance (PMI) — Typical Market Rates (Reference Only)

PMI is required on conventional loans when your down payment is less than 20%. It protects your lender — not you — in the event of default. Under the Homeowners Protection Act (HPA), PMI must be automatically cancelled when your loan balance reaches 78% of the original purchase price, and you may request cancellation once it reaches 80%.

This calculator uses the PMI rate you enter above — it does not calculate a rate from your credit score. The table below shows typical market PMI pricing by credit tier for general reference only; your actual rate depends on your lender, loan program, credit profile, and loan-to-value ratio.

The 28/36 Rule — US Affordability Standard

The 28/36 rule is the foundational affordability guideline used by US lenders and financial planners:

• 28% front-end ratio — Housing costs (P&I + property tax + homeowners insurance + PMI + HOA) ≤ 28% of gross monthly income.
• 36% back-end ratio — All monthly debt payments (housing + car loans + student loans + credit cards) ≤ 36% of gross monthly income.

Fannie Mae's Selling Guide (B3-6-02) caps manually underwritten loans at 36% DTI in general, extending to 45% only when specific credit score and reserve requirements are met; loans run through Desktop Underwriter (DU) automated underwriting can reach up to 50% for well-qualified borrowers — but staying closer to 28/36 provides genuine financial security.

Loan Types: Conventional, FHA, VA, and USDA

Conventional loans (backed by Fannie Mae/Freddie Mac) require 620+ credit and 3–20% down; no government-mandated MIP once you reach 20% equity. FHA loans (backed by HUD) accept 580+ credit with just 3.5% down, but carry an upfront MIP of 1.75% plus annual MIP for the life of the loan.

VA loans (for eligible veterans and service members) offer 0% down, no PMI, and competitive rates — often the best deal available if you qualify. USDA loans offer 0% down for eligible rural and suburban properties with a small annual fee but no conventional PMI.

Mortgage Interest Tax Deduction

US homeowners who itemize deductions on Schedule A can deduct mortgage interest paid on up to $750,000 of mortgage debt on a primary or secondary residence (for loans originated after December 15, 2017; older loans have a $1M cap). The 2017 Tax Cuts and Jobs Act nearly doubled the standard deduction ($16,100 single / $32,200 married filing jointly in 2026, per IRS inflation adjustments) — compare both to maximize your benefit.

5 Strategies to Pay Off Your US Mortgage Faster

1. Make one extra payment per year — Applying a 13th payment annually to principal reduces a 30-year mortgage to approximately 25 years.
2. Round up to the nearest $100 — Even rounding $1,847 to $1,900 each month meaningfully accelerates payoff.
3. Refinance when rates drop 0.75%+ — The break-even point for refinancing is typically 18–30 months. If you plan to stay that long, refinancing can save tens of thousands.
4. Apply windfalls to principal — Tax refunds, bonuses, and inheritances applied directly to principal provide an outsized return compared to any savings account.
5. Consider a 15-year at renewal or refi — The interest savings on a 15-year mortgage vs. a 30-year are dramatic: often $100,000–$200,000 on a $400K loan.