Mortgage calculator: what will the house actually cost you each month?

Principal and interest come from one standard formula: M = P × r(1 + r)ⁿ ÷ ((1 + r)ⁿ − 1). P is the loan amount. r is the monthly interest rate, which is the yearly rate divided by 12. n is the number of monthly payments, 360 on a 30-year loan. On the example loan on this page, $380,000 at 6.5% for 30 years, r is 0.005417, n is 360, and M comes out to about $2,402.

Property tax, homeowners insurance, mortgage insurance and any HOA dues are added on top, because that is what actually leaves your account each month. The calculator on this page does all of it at once.

Three things on every loan, and two more on only some. Principal and interest go to the loan. Property taxes and homeowners insurance are usually collected with the payment and held in escrow. Mortgage insurance is added only if you put less than 20% down on a conventional loan, or use an FHA or USDA loan. With 20% down or a VA loan, there is none.

HOA dues apply only if the home is in an association. They are paid to the association, not the lender, but they count when you qualify, so the calculator adds them when you enter them.

Your property tax and insurance bills are the same either way. What changes is who pays them. With escrow, your lender collects property tax and homeowners insurance with each monthly payment and pays those bills when they come due. You make one payment and have no large bills to plan for.

With no escrow, sometimes called an escrow waiver, your monthly payment to the lender is smaller. You pay the county and your insurance company yourself. In Minnesota, property tax on most homes is due in two halves, May 15 and October 15. Not every loan can skip escrow, so text me at (952) 393-6551 and I'll see if yours is escrow waiver eligible. The calculator on this page shows your payment both ways.

Yes, but usually a smaller policy. When the association's master policy insures the building, you buy an HO-6 policy. It covers the inside of your unit, your belongings and liability. It usually costs much less than a policy on a detached house, which is called an HO-3.

Associations don't all cover the same things, so ask for the master policy before you get a quote. In the calculator on this page, check the condo or townhome box and the insurance estimate drops to match. Then replace it with your real quote.

PMI is private mortgage insurance. It protects the lender if the loan isn't repaid. You pay for it only when you put less than 20% down on a conventional loan. It usually runs about 0.5 to 1.5% of the loan amount per year, set by your credit score and down payment. It's added to the monthly payment.

You can ask to have it removed once the loan balance reaches 80% of the home's original value. It ends automatically at 78% as long as your payments are current. Paying extra toward the balance gets you there sooner. FHA works differently: 1.75% up front plus an annual premium. With less than 10% down, it stays for the life of the loan unless you refinance.

The median effective property tax rate in Minnesota is about 1.13% of a home's value per year. In the Twin Cities it runs from about 1.01% in Scott County to 1.34% in Ramsey County. Hennepin County is about 1.26% and Dakota County is about 1.09%. On a $400,000 home, that's a spread of roughly $110 a month between counties.

The real bill depends on the city, the school district and the home itself. Pick your county in the calculator for the median rate, then swap in the tax amount on the listing as soon as you have one.

Lenders start with your debt-to-income ratio: your monthly debts, including the new house payment, divided by your gross monthly income. A total of 36% is the long-standing comfortable benchmark, many loans allow up to 45%, and a strong file can go to 50%. What a lender will approve and what's comfortable for your family aren't always the same number, so we look at both.

The "How much house can I afford?" tool on this page works backward from your income, your other monthly debts and your down payment. It gives you a comfortable price and a top-of-range price, each with the full payment. Your pre-approval is the real answer.

Take the example loan on this page: $380,000 at 6.5% for 30 years. An extra $100 a month pays it off about 3 years 3 months sooner and saves about $63,434 in interest. An extra $200 a month cuts about 5 years 10 months and saves about $110,461. Every extra dollar goes straight to the balance, so the earlier you start, the more it does.

Type any amount into the extra payment box in the calculator and it shows the new payoff for your numbers. Most loans let you pay extra whenever you like, with no penalty; I'll confirm that on yours.

Not on this page, and that's on purpose. A 360-line amortization schedule shows how much of each early payment goes to interest. That is true of every mortgage, and it tends to scare people away from a decision they've already made carefully. What most buyers actually want to know is the payment, when PMI ends and what extra payments do, and the calculator answers all three.

If you'd like the full amortization schedule for your loan, month by month, text me at (952) 393-6551 and I'll send it with your real numbers.

The 30-year loan has the lower payment and the 15-year loan is paid off twice as fast with far less total interest. On the example loan, $380,000 at the same 6.5% example rate, principal and interest run about $2,402 a month over 30 years and about $3,310 over 15 years.

Many buyers take the 30-year for the breathing room and then pay extra when they can. That gets most of the benefit without locking in the bigger payment. Rates also differ by term, so text me and I'll run both for your file.

No. It's an example so the math has something to work with, not a quote and not an offer. Your rate depends on your credit, down payment, loan type, the property and the market on the day you lock. Text me the address at (952) 393-6551 and I'll run real numbers for your file. No application and no credit pull for a first conversation.

It shows them separately, because closing costs are cash you bring to closing, not part of the monthly payment. Closing costs for a buyer in Minnesota typically run about 2 to 5% of the purchase price. That includes the state mortgage registry tax of 0.23% of the loan amount (0.24% in Hennepin and Ramsey counties). Your Loan Estimate lists every line.