Why the total interest number matters more than the rate
A quarter-point rate difference sounds trivial and looks trivial in the monthly payment — maybe $60. Across 30 years on a median loan it is over $20,000. Comparing lenders on total interest rather than monthly payment is the single highest-value thing a borrower can do.
PMI: what it costs and how to kill it
Below 20% down, private mortgage insurance typically adds 0.5–1% of the loan per year and protects the lender, not you. It cancels automatically at 78% loan-to-value on the original schedule, but you can request removal at 80% — and if values have risen, a new appraisal can get you there years earlier. That request is free money most borrowers never make.
Escrow surprises
Taxes and insurance are estimates collected monthly. When the assessor revalues the property or the insurer raises premiums, the servicer recalculates and your payment jumps — often several hundred dollars, with a shortfall bill attached. Budget on a payment 5–10% above the calculated figure for the second year onward.
Points, credits, and the break-even
Paying a point (1% of the loan) typically buys about 0.25% off the rate. Divide the cost by the monthly saving to get the break-even in months — usually 4–7 years. Buy points only if you are confident you will hold the loan past that point; most people refinance or move first.
FAQ
How much is the monthly payment on a $400,000 mortgage?
At 6.75% over 30 years, principal and interest on a $400,000 loan is about $2,594. Adding typical taxes and insurance brings the full payment near $3,200. Enter your own numbers above for the exact figure.
How much total interest will I pay?
On a 30-year loan at current rates, total interest usually exceeds the amount borrowed. The calculator shows the exact figure and the crossover month where principal finally outweighs interest in each payment.
Should I take a 15-year or 30-year mortgage?
The 15-year carries a lower rate and saves an enormous amount of interest, but the payment is roughly 40% higher and is contractually fixed. A 30-year with voluntary extra payments gives most of the benefit with the option to stop in a hard month.
Does this include PMI?
Yes — when the down payment is under 20%, PMI is added at roughly 0.6% of the loan per year and shown as its own line so you can see what reaching 20% equity is worth.
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