Methodology and Data Sources

This page lists every formula, rule and data source the calculators use, so you can check a result yourself.

Principal and interest

Monthly principal and interest use the standard fixed-rate formula: M = P × [r(1 + r)ⁿ] ÷ [(1 + r)ⁿ − 1], where P is the loan amount, r is the annual rate divided by 12, and n is the number of monthly payments. At a 0% rate the payment is P ÷ n.

The amortization schedule rounds each month's interest and payment to the cent, as lenders do. The final payment absorbs the small rounding difference, so the balance ends at exactly zero. Total interest in the schedule can therefore differ from the unrounded figure by about a dollar.

The full monthly payment

Total = principal and interest + property tax + home insurance + HOA dues + mortgage insurance (when it applies). Property tax, insurance and HOA are monthly amounts. Upfront program fees (FHA, VA, USDA) are added to the loan and included in principal and interest, which is how they are usually financed.

Default values

• Interest rate: starts at the Freddie Mac weekly national average (7.28% for 30 years as of October 1, 2026). It is a benchmark, not a quote. Enter your lender's rate.
• Property tax: if you enter a ZIP code, the county's effective rate, which is the Census Bureau's median real estate tax paid divided by the median home value, for owners with a mortgage. Without a ZIP, 1% of the home price per year. Actual bills depend on the local assessment and exemptions, and many areas reassess a home after it sells.
• Home insurance: a placeholder of $165 per month. Premiums vary with location, rebuild cost and coverage. Get a quote.
• ZIP codes: matched to a county using the Census Bureau's ZIP Code Tabulation Area crosswalk. A ZIP that spans several counties uses the county holding most of its land area, and some ZIP codes (for example, PO boxes only) have no match.

Mortgage insurance and program fees

• Conventional PMI applies when the loan-to-value ratio is above 80%. We estimate an annual rate as a percent of the loan for a borrower with good credit: 0.45% (80.01% to 85% LTV), 0.70% (85.01% to 90%), 0.90% (90.01% to 95%), 1.20% (above 95%). These are rough midpoints, not quotes. The "PMI ends around year N" message uses the point where the scheduled balance first reaches 78% of the original price, when the Homeowners Protection Act requires automatic termination. You can usually request cancellation at 80%.
• FHA: an upfront premium of 1.75% of the base loan, financed, plus an annual premium per HUD Mortgagee Letter 2023-05 (loans endorsed on or after March 20, 2023): for terms over 15 years and base loans up to $726,200, 0.50% at 95% LTV or less and 0.55% above 95%; 0.70% and 0.75% above that loan size. The premium lasts 11 years at 90% LTV or less and for the loan term otherwise. Minimum down payment 3.5%. Premiums are estimated on the starting loan balance, which slightly overstates later years.
• VA: a one-time funding fee on the loan amount, financed, using the chart effective April 7, 2023: first use 2.15% (under 5% down), 1.50% (5% to under 10%), 1.25% (10% or more); later use 3.30% under 5% down. Veterans with a service-connected disability rating are exempt. No monthly mortgage insurance and no required down payment.
• USDA: a 1.00% upfront guarantee fee, financed, and a 0.35% annual fee for the life of the loan. No required down payment. USDA loans also have property location and household income limits that this calculator does not check.

Program fee schedules change. The VA schedule was confirmed on va.gov on the date we last reviewed it, and the FHA schedule was cross-checked against a second source because hud.gov blocks automated access. Always confirm with a lender.

Conforming loan limits

The jumbo-loan note compares your conventional loan to the FHFA one-unit conforming loan limit for your county (or the national baseline if no ZIP is entered). FHA and VA limits differ and are not modeled.

Extra payments and comparisons

Extra payments go entirely to principal and do not change the scheduled payment, so the loan ends sooner. Interest saved is the baseline total interest minus the total interest with the extra payments. The term comparison holds price, down payment and rate constant; real rates are usually lower for shorter terms.

Affordability estimate

The affordability calculator works backward from your income. Each level sets a housing limit and a total-debt limit as a share of gross monthly income: comfortable 25% / 33%, standard 28% / 36%, stretch 31% / 43%. The monthly housing budget is the lower of the housing limit and (total-debt limit − your other monthly debts). 28/36 is the traditional conventional guideline and 31/43 is the common FHA benchmark. The comfortable level is a conservative planning guide that we chose. None of them is a lender approval.

We then find the highest home price whose full monthly payment (principal and interest, property tax scaled to the price, insurance, HOA and estimated PMI) fits the budget, holding your down payment fixed in dollars. Prices are shown rounded down to the nearest $1,000. The "what would raise your price" figures re-run the same calculation with one change at a time.

Data sources

Local data is refreshed by an automated pipeline that validates each release before it is published. Current release: 2026-10-01-c94cd85a.

Census property tax and home value figures are medians and estimates with sampling error, and small counties are less precise. The figures describe existing owners, not a new purchase.

What is not included

Closing costs, points, origination fees, escrow cushions, special assessments, adjustable-rate changes and taxes saved through deductions are not included. Your lender's Loan Estimate is the document to rely on for an actual offer.

Testing

The calculation code has automated tests that check results against known examples, published program examples, and independent closed-form calculations. Browser tests check the finished pages against a separate implementation of the maths.