It depends on four things: the home price, your down payment, the interest rate, and the loan term. As a rough guide, a 30-year loan at today’s rates runs about $6.50–$7 per month for every $1,000 borrowed in principal and interest — before taxes and insurance.

Here are realistic full monthly payments, assuming a 30-year fixed at 7%, 15% down, and typical taxes, insurance, and PMI. Your actual taxes and insurance vary a lot by location, so treat these as ballpark:

The “total payment” column includes property taxes, homeowners insurance, and PMI — the real number that hits your bank account each month. Use the calculator at the top of this page to plug in your own numbers, or our affordability calculator to work backward from your income.

Your monthly payment is more than just paying back the loan — for most borrowers it bundles four things together, known as PITI: principal, interest, taxes, and insurance.

The full equation lenders use is:

• Principal — the part that pays down what you borrowed.
• Interest — the lender’s charge for the loan.
• Taxes & insurance — usually collected monthly into an escrow account and paid for you when the bills come due.
• PMI or HOA — added when they apply.

That’s why a quoted “principal & interest” figure is always lower than the payment you actually send.

PITI stands for Principal, Interest, Taxes, and Insurance — the four pieces of a typical monthly mortgage payment.

Lenders look at your full PITI payment — not just principal and interest — when deciding how much you qualify for, because that’s your true monthly housing cost.

Principal is the money you borrowed; interest is what the lender charges to lend it to you. Every payment is split between the two.

Early in the loan, most of your payment goes to interest because the balance is large. As the balance shrinks, more of each payment goes to principal — this shift is called amortization. On a $300,000 loan at 7%, your very first payment is roughly $1,750 interest and only about $200 principal; by the final years that flips almost entirely to principal.

Paying a little extra toward principal early on can save tens of thousands in interest — see our bi-weekly payment calculator.

An escrow account is a holding account your lender uses to collect your property taxes and homeowners insurance a little each month, then pay those bills for you when they’re due.

Instead of getting hit with a big tax bill once or twice a year, you pay roughly one-twelfth of it with each mortgage payment. The lender holds the money and sends it to the county and your insurer on time. If those bills rise, your escrow portion — and your total payment — adjusts to keep up. Most loans with less than 20% down require escrow; many borrowers keep it anyway for the convenience.

Private mortgage insurance (PMI) is a monthly charge added when your loan is more than 80% of the home’s value — it protects the lender, not you, and you can usually get rid of it.

PMI typically runs about 0.3%–1.0% of the loan per year, based on your credit and down payment. On conventional loans it’s not permanent: it automatically drops off once you reach 78% of the original value, or you can request removal at 80%.

• Avoid it by putting 20% down.
• Drop it as your balance falls or your home appreciates.
• Note: FHA loans use a different mortgage insurance (MIP) that often lasts the life of the loan — a key reason to compare programs.

Property taxes are based on your home’s value and your local tax rate, then divided by 12 and added to each monthly payment.

Rates vary widely by state and county — from under 0.5% of value per year in low-tax areas (much of Colorado) to over 2% in high-tax states. On a $400,000 home at a 1% effective rate, that’s $4,000 a year, or about $333 a month in your payment. If you know your exact annual tax, enter it in the calculator; otherwise an estimate based on price gets you close.

Homeowners insurance protects your home against fire, storms, theft, and liability — lenders require it, and the annual premium is usually split into your monthly payment through escrow.

Premiums commonly run a bit under 1% of the home’s value per year, though they vary by location, age of home, and coverage. On a $400,000 home, figure roughly $1,500–$2,500 a year, or about $125–$210 a month. It covers your liability as the owner and insures against hazards and loss — separate from PMI, which only protects the lender.

HOA (Homeowners Association) dues are monthly fees paid in some condo, townhome, and planned communities to cover shared amenities, maintenance, and sometimes insurance.

They’re not part of your loan, but lenders count them in your total housing cost when you qualify, so they affect how much home you can afford. Dues range from a small amount to several hundred dollars a month. If your home has no HOA, leave that field blank in the calculator.

Principal and interest are set by a standard amortization formula using your loan amount, interest rate, and the number of payments — then taxes, insurance, and any PMI or HOA are added on top.

The number of payments is the term times 12: a 30-year loan is 360 payments, a 15-year loan is 180. The formula spreads the loan and interest evenly so your principal-and-interest payment stays the same every month, even though the split between principal and interest changes over time. Our calculator does the math instantly — you just enter the loan amount, rate, and term.

Less than you might think — the “20% down” rule is a myth. Minimums depend on the loan program, and several allow little or nothing down.

A bigger down payment lowers your monthly payment and can eliminate PMI at 20% — but keeping cash in reserve has value too. Try different down payments in the calculator, or see our VA loan tools.

The interest rate is what your loan charges to borrow; the APR is the broader yearly cost once lender fees and points are folded in — so APR is usually a bit higher than the rate.

The note rate drives your monthly payment. The APR is a standardized number meant to help you compare offers, because it captures points and certain fees, not just the rate. Two loans with the same rate can have different APRs if one has higher fees. See exactly how it works in our APR calculator.

Closing costs are the one-time fees to set up your loan and transfer the home — typically about 2%–5% of the loan amount, paid at closing.

They include lender fees (origination, underwriting), third-party costs (appraisal, title, recording), and prepaid items (the first chunk of taxes and insurance to fund your escrow). On a $300,000 loan, expect roughly $6,000–$15,000. The good news: closing costs are often negotiable, and a seller credit can cover much or all of them — ask us how to structure that.

The main options are conventional, FHA, VA, USDA, and jumbo — each with different down payment, credit, and mortgage-insurance rules.

The right one depends on your credit, down payment, and goals — we’ll match you to the cheapest option you qualify for.

A fixed rate stays the same for the whole loan; an adjustable rate (ARM) is fixed for a few years, then resets periodically. Fixed is simpler and safer; an ARM can save money if you’ll move or refinance soon.

A 5-year ARM, for example, holds one rate for five years, then adjusts annually. The early rate is often lower than a comparable fixed loan, which helps if you plan to sell or refinance before it adjusts. If you’ll keep the home long term, a fixed rate removes the risk of payments rising later. Most buyers choose 30-year fixed for the certainty.

Conforming loans meet the size limits and rules set by Fannie Mae and Freddie Mac; non-conforming loans (like jumbo loans) fall outside those limits or rules.

The conforming loan limit changes yearly and is higher in expensive markets. Stay at or under it and you get the most standardized pricing and easiest approval. Go above it and you’re in jumbo territory — bigger loans that aren’t government-backed, usually needing stronger credit and a larger down payment, though rates remain competitive.

It comes down to your income, debts, credit, and down payment — lenders mainly look at your debt-to-income (DTI) ratio to set the ceiling.

Your DTI compares your total monthly debts (including the new PITI payment) to your gross monthly income. Most programs want that under roughly 43%–50%, with the exact limit depending on the loan type and your credit. The best way to know your real number is a quick pre-approval. Estimate it now with our What Can I Afford calculator, then let’s get you pre-approved.