Principal, interest, taxes, and insurance — the full PITI picture, not just the rate they advertise. See what your home actually costs every month.
The number your lender quotes is typically just principal and interest — the "P&I" on a 30-year fixed. But your real monthly housing cost includes property taxes and insurance (and PMI if your down payment is under 20%). PITI is what you actually owe each month.
On a 30-year mortgage, you'll pay roughly the same amount in interest as the original loan amount if you carry it to term. That's why making extra principal payments early in the loan saves dramatically more than making them later — the amortization schedule is heavily front-loaded with interest in the first decade.
The 28% rule suggests your monthly housing payment shouldn't exceed 28% of your gross monthly income. But that's a starting point, not a hard rule — cost of living, other debt, and your savings goals all matter more than a generic formula.
Private mortgage insurance is required on conventional loans when your down payment is less than 20%. It typically costs 0.5–1.5% of the loan amount annually. Once your loan balance drops below 80% of the original home value — either through payments or appreciation — you can request removal. On an FHA loan, MIP works differently and may require refinancing to eliminate.
A 15-year mortgage carries a significantly lower rate and you'll pay roughly half the total interest of a 30-year loan. But the monthly payment is 40–50% higher. The 30-year gives you flexibility — you can always pay extra toward principal when you have it, effectively converting it to a shorter loan on your schedule without being locked into higher required payments.
In the early years of a mortgage, most of your payment goes to interest — not principal. On a $400,000 loan at 6.75%, your first payment includes about $2,250 in interest and only $350 reducing the actual balance. By year 20, those numbers start to flip. This is why extra payments made in years 1–5 have an outsized impact on total interest paid.
After several years of rate volatility, the 30-year fixed rate has stabilized in the 6.5–7.5% range for borrowers with strong credit profiles. Your actual rate depends on credit score, loan-to-value ratio, loan type, property type, and lender. Shopping 3–4 lenders and getting rate quotes within a 45-day window (to minimize credit score impact) is the most reliable way to find your actual best rate.