How to use this calculator
Start with the home price and your planned down payment percentage. Enter the current mortgage interest rate (check Bankrate or Freddie Mac for today's rates) and choose your loan term. The defaults for property tax, insurance, and maintenance are national averages — adjust them for your area.
The results show three views: your true monthly cost (not just the mortgage payment), your total year-one recurring costs, and your total out-of-pocket for year one including down payment and closing costs. The monthly breakdown shows exactly where your money goes.
Costs most first-time buyers miss
The mortgage payment gets all the attention, but it's rarely the full story. Property taxes can add hundreds per month depending on your state — New Jersey averages over 2% of home value while Hawaii is under 0.3%. Homeowner's insurance has been rising sharply, especially in disaster-prone areas.
If your down payment is below 20%, Private Mortgage Insurance (PMI) adds another 0.5–1% of the loan amount annually. And maintenance isn't optional — roofs, HVAC systems, appliances, and plumbing don't care about your budget. The 1% rule (set aside 1% of home value per year) keeps you from being caught off guard.
Average property tax rates by state
| State | Avg. Rate | Annual on $350K Home |
|---|---|---|
| New Jersey | 2.23% | $7,805 |
| Illinois | 2.08% | $7,280 |
| Texas | 1.68% | $5,880 |
| California | 0.71% | $2,485 |
| Florida | 0.86% | $3,010 |
| Arizona | 0.62% | $2,170 |
| New York | 1.62% | $5,670 |
| National Avg. | 1.10% | $3,850 |
Frequently asked questions
What's included in a mortgage payment?
A mortgage payment has two parts: principal (paying down the loan) and interest (what the bank charges). Many lenders also escrow property tax and insurance into your payment, but those are separate costs. This calculator breaks them all out so you see the true total.
How much should I put down?
20% avoids PMI, which saves you 0.5–1% of the loan per year. But putting down less isn't always wrong — if it means keeping an emergency fund, that financial cushion can be more valuable than avoiding PMI. FHA loans allow as little as 3.5% down.
Why does so much go to interest in year one?
Mortgages are front-loaded with interest. In the early years, your balance is highest, so the interest charge is largest. Over time this flips — by the end of a 30-year loan, most of each payment goes to principal. This is called amortization.
What are closing costs?
Closing costs cover lender fees, title insurance, appraisal, and prepaid items like property tax and insurance escrow. They typically run 2–5% of the home price. This calculator uses 3% as a middle-ground estimate.