Advanced Mortgage Calculator
Understanding Your Mortgage: Key Factors to Consider
How Mortgage Payments Work
A mortgage payment consists of four main components:
- Principal: The amount paying down your loan balance
- Interest: The cost of borrowing the money
- Taxes: Property taxes paid through escrow
- Insurance: Homeowners insurance and possibly PMI
The Power of Down Payments
20% Down Benefits
- No Private Mortgage Insurance (PMI)
- Lower monthly payments
- Better interest rates
- More equity immediately
Low Down Payment Options
- FHA loans (3.5% down)
- Conventional loans (3% down)
- VA loans (0% down)
- USDA loans (0% down)
15-Year vs. 30-Year Mortgages
| Factor | 15-Year | 30-Year |
|---|---|---|
| Monthly Payment | Higher | Lower |
| Total Interest Paid | Much Less | More |
| Interest Rate | Lower | Higher |
| Build Equity | Faster | Slower |
Pro Tip: Making one extra mortgage payment per year can shorten a 30-year mortgage by about 7 years and save tens of thousands in interest.