Estimate your monthly mortgage payment with our free calculator. Get detailed breakdowns including principal, interest, taxes, insurance, and PMI.
Mortgage rates in early 2026 are stabilizing after years of volatility. The average 30-year fixed-rate mortgage hovers around 6.5% to 7.0%, down from the October 2023 peak of 7.79% but well above the historic lows of 2020–2021 when rates dipped below 3%.
For 15-year fixed mortgages, current rates range from 5.8% to 6.3%, offering borrowers a lower rate in exchange for higher monthly payments. ARM (adjustable-rate mortgage) products remain less popular but can save money for buyers planning to move or refinance within 5–7 years.
Rates vary by credit score, down payment, loan type, and lender. Borrowers with 740+ credit scores and 20% down payments qualify for the best published rates, while those with 680 credit and 10% down may see rates 0.5–1.0% higher.
The Federal Reserve's rate policy remains the primary driver of mortgage costs. While inflation has cooled from its 2022 peak, the Fed maintains elevated benchmark rates to ensure stable economic conditions. Most economists expect modest rate declines through 2026, but buyers shouldn't wait — home prices continue rising faster than rates are falling in most markets.
Use this table to estimate your monthly principal and interest payment based on your loan amount. These calculations assume a 6.75% interest rate (current national average) and do not include property taxes, insurance, or HOA fees — which typically add $300–$800 per month depending on location.
Key insight: Over 30 years, you'll pay approximately 67% of your original loan amount in interest alone. A $400,000 mortgage costs $533,840 in interest over its lifetime. Switching to a 15-year mortgage cuts total interest by more than half — but raises the monthly payment by 37%.
Not all mortgages are created equal. Understanding the differences between loan types can save you tens of thousands of dollars over the life of your loan.
Home prices vary dramatically across U.S. markets, directly impacting affordability. Here's what a 20% down payment and the resulting monthly principal and interest payment looks like in 10 major cities:
Remember: These figures show principal and interest only. Add property taxes ($200–$1,200/mo depending on location), homeowners insurance ($100–$400/mo), and HOA fees if applicable to get your true monthly housing cost.
Home prices — and the payments and income needed to qualify — vary widely by cost tier, from affordable inland markets to very-high-cost coastal metros. Here's what homebuyers can expect across cost tiers, including the income needed to qualify under standard 28/36 debt-to-income rules:
Lenders use the 28/36 rule to determine how much mortgage you qualify for. Your monthly housing costs (mortgage, taxes, insurance, HOA) should not exceed 28% of your gross monthly income. Your total debt payments (housing + car loans + credit cards + student loans) should not exceed 36% of gross income.
Here's how this translates into maximum mortgage amounts by household income:
Note: These calculations assume no other monthly debt obligations. If you have car loans, student loans, or credit card balances, your maximum affordable mortgage will be lower.
Closing costs typically range from 2% to 5% of your loan amount. On a $400,000 mortgage, expect to pay $8,000 to $20,000 in upfront fees beyond your down payment. These costs include:
Some lenders offer "no-closing-cost" mortgages, where the lender covers upfront fees in exchange for a higher interest rate (typically 0.25–0.5% higher). This can make sense if you plan to refinance or sell within 5–7 years.
A 0.5% difference in mortgage rate can save you tens of thousands over 30 years. Here are six proven ways to qualify for the lowest available rate:
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Buy This Calculator — $9Or Get the Remodeling Bundle — $39With 20% down ($80,000), a $320,000 loan at 6.75% interest results in a monthly principal and interest payment of $2,076. Add property taxes ($250–$600/month), homeowners insurance ($100–$250/month), and HOA fees if applicable. Total monthly housing cost typically ranges from $2,425 to $2,925 depending on location.
Current mortgage rates in 2026 average 6.5% to 7.0% for 30-year fixed mortgages, and 5.8% to 6.3% for 15-year fixed loans. Your actual rate depends on credit score, down payment, loan type, and lender. Borrowers with 740+ credit and 20% down qualify for the best rates, while those with 680 credit and 10% down may pay 0.5–1.0% more.
Conventional loans require as little as 3% down for first-time buyers, though 20% down avoids PMI (private mortgage insurance). FHA loans require 3.5% down. VA and USDA loans offer 0% down for eligible buyers. On a $400,000 home: 3% = $12,000, 10% = $40,000, 20% = $80,000. Higher down payments result in lower monthly payments and better interest rates.
The minimum credit score for most conventional mortgages is 620. FHA loans accept scores as low as 580 (or 500 with 10% down). However, to qualify for the best rates, aim for 740 or higher. Credit scores of 680–739 face 0.25–0.5% higher rates, while scores below 680 see rates increase by 0.5–1.5% and may require larger down payments.
A 30-year mortgage offers lower monthly payments ($2,594 on a $400K loan at 6.75%) but costs $533,840 in total interest. A 15-year mortgage has higher payments ($3,546) but cuts total interest to $238,280 — saving $295,560. Choose a 30-year if you need lower payments or want to invest extra cash elsewhere. Choose a 15-year if you can afford higher payments and want to build equity fast.
Closing costs range from 2% to 5% of the loan amount. On a $400,000 mortgage, expect $8,000 to $20,000 in fees including loan origination (0.5–1%), appraisal ($400–$800), title insurance ($1,000–$3,000), prepaid property taxes and insurance, and recording fees. Some lenders offer no-closing-cost loans with slightly higher interest rates (typically 0.25–0.5% higher).
PMI (Private Mortgage Insurance) protects lenders when you put down less than 20%. PMI typically costs 0.5% to 1% of the loan amount annually — $2,000 to $4,000 per year on a $400K loan, or $167–$333 per month. To avoid PMI: put down 20% or more, use a VA loan (veterans/military), or take a piggyback loan (80-10-10 structure). Once you reach 20% equity, you can request PMI removal.
Buying points means paying 1% of the loan amount upfront to reduce your interest rate by about 0.25%. On a $400,000 mortgage, one point costs $4,000 and saves roughly $60/month. You break even in 67 months (5.6 years). Buy points if you plan to stay in the home 7+ years and have extra cash at closing. Skip points if you might move or refinance within 5 years.
Using the 28/36 rule (housing costs ≤ 28% of gross income), you need approximately $139,000 annual income to afford a $500,000 mortgage ($3,243/month payment at 6.75%). With taxes and insurance, total housing cost is around $3,800/month, requiring $163,000 annual income. Lenders also consider total debt — if you have car loans or student loans, you'll need higher income or a larger down payment.
Buying makes sense if you plan to stay 5+ years, have stable income, and can afford a 10–20% down payment. At current rates, the break-even point (when buying becomes cheaper than renting) is typically 4–6 years depending on your market. Consider buying if: rents are rising rapidly, you want equity building, or you need stability. Consider renting if: you might move within 3 years, your market has falling prices, or you lack emergency savings for repairs.
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