Mortgage Calculator

A mortgage is a secured loan that uses the property itself as collateral. Mortgage interest rates are influenced by several factors, including the Federal Reserve's monetary policy, the bond market (particularly 10-year Treasury yields), inflation expectations, and your individual credit profile. Lenders also consider your debt-to-income ratio, employment history, and the loan-to-value ratio when determining your rate. Shopping multiple lenders — at least three to five — is one of the most effective ways to secure a lower rate, as quotes can vary by 0.5% or more for the same borrower.

The True Cost of Buying a Home

Your mortgage payment is only part of the total cost of homeownership. Closing costs typically add 2-5% of the purchase price, covering appraisals, title insurance, origination fees, and prepaid taxes and insurance. Ongoing costs include property taxes (averaging 1.1% nationally but ranging from 0.3% in Hawaii to over 2% in New Jersey), homeowners insurance, potential HOA fees, and maintenance (budget 1-2% of the home value annually). Understanding these costs upfront prevents financial strain and ensures you buy within your true budget rather than just what the lender approves.

When to Refinance Your Mortgage

Refinancing replaces your existing mortgage with a new one, ideally at better terms. The most common reason is to lock in a lower interest rate, but homeowners also refinance to switch from an adjustable rate to a fixed rate, eliminate PMI after reaching 20% equity, or access home equity through a cash-out refinance. The key metric is your break-even point — divide total closing costs by monthly savings to determine how many months it takes to recoup the expense. If you plan to stay in the home beyond that break-even period, refinancing is likely worthwhile.