How Much House Can I Afford? The 28/36 Rule Explained
Understand front-end and back-end debt-to-income (DTI) ratios, down payment requirements, and lender affordability caps.
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2026 Statutory Rates
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Mortgage Payment Calculator (2026)
Calculate your complete monthly housing payment (PITI: Principal, Interest, Property Taxes, and Homeowners Insurance). See exact breakdowns and amortizations with real-time statutory benchmarks.
Quick Answer: A standard monthly mortgage payment consists of four components known as PITI: Principal (paying down your loan balance), Interest (the lender charge, based on your APR), Property Taxes (local municipal levies, averaging 1.10% nationally), and Homeowners Insurance (averaging 0.50% annually). If your down payment is below 20%, Private Mortgage Insurance (PMI) is added until you reach 20% home equity. For a $250,000 home with 20% down ($50,000) on a 30-year fixed loan at 6.87%, the baseline monthly principal and interest payment is exactly $1,314.
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Last reviewed: October 2026
Calculation Methodology: Mortgage Payment Calculator (2026)
Mathematical Formula
M = P · [r(1 + r)^n] / [(1 + r)^n - 1]
M = Monthly Principal & Interest payment
P = Principal loan amount (Home Price minus Down Payment)
r = Monthly interest rate (Annual Interest Rate ÷ 12 months ÷ 100)
n = Total number of monthly payments (Loan term in years × 12)
Verified Worked Example (Benchmark)
Benchmark Parameters: Home Price = $250,000 · Down Payment = 20% ($50,000) · Loan Term = 30 Years (360 months) · Interest Rate = 6.87% APR.
- Loan Principal (P): $250,000 - $50,000 = $200,000.
- Monthly Interest Rate (r): 0.0687 ÷ 12 = 0.005725.
- Total Payments (n): 30 × 12 = 360 payments.
- Factor (1 + r)^n: (1.005725)^360 ≈ 7.77196.
- Monthly Principal & Interest (P&I): $200,000 × (0.005725 × 7.77196) ÷ (7.77196 - 1) = $1,313.27 ≈ $1,314/mo.
- Property Tax (1.10% avg): ($250,000 × 0.011) ÷ 12 = $229.17/mo.
- Home Insurance ($1,250/yr): $1,250 ÷ 12 = $104.17/mo.
- PMI: $0 (down payment is 20%).
- Total Monthly PITI: $1,313.27 + $229.17 + $104.17 = $1,646.61/mo.
Primary Statutory Sources & Authorities
- Freddie Mac Primary Mortgage Market Survey (PMMS) — Weekly national benchmark 30-year and 15-year fixed mortgage rates.
- Consumer Financial Protection Bureau (CFPB) — Federal guidance on loan structures, closing costs, and private mortgage insurance (PMI).
- Tax Foundation / US Census Bureau — National and county median effective real estate property tax benchmarks.
- Insurance Information Institute (III) — National homeowners insurance loss cost averages and coverage standards.
Frequently Asked Questions
Primary source guidance on rules, formulas, and regulations.
A complete monthly mortgage payment (PITI) includes Principal (paying down what you borrowed), Interest (the lender fee based on your interest rate), Property Taxes (levied by county or city governments), and Homeowners Insurance (protecting the property structure). If your down payment is less than 20% on a conventional loan, it also includes Private Mortgage Insurance (PMI).
PMI is insurance that protects the mortgage lender if you default on payments. It is required on conventional mortgages when you put down less than 20%. Under the federal Homeowners Protection Act of 1998, lenders must automatically terminate PMI once your mortgage balance reaches 78% of the original property value, provided payments are current, or you can request cancellation once you hit 80% equity.
A 15-year fixed mortgage carries higher monthly payments because you amortize the debt over half the time, but lenders offer lower interest rates (typically 0.75% to 1.00% lower than 30-year loans) and you save tens of thousands of dollars in total lifetime interest.
Most mortgage servicers set up an escrow account where they collect 1/12th of your estimated annual property taxes with each monthly mortgage payment. When taxes are due to your municipal government, the servicer pays them directly from your escrow funds.
Making one additional monthly mortgage payment toward principal each year on a 30-year fixed loan at 6.87% can shorten your loan term by more than 4 to 6 years and save over $30,000 to $60,000 in total interest over the life of the loan.