Answers to the most common mortgage questions — from how payments are calculated to PMI, credit scores, ARM risks, and when buying beats renting.
Everything you need to know about mortgages, payments, rates, and the home buying process.
Your monthly payment (P&I) uses the standard amortization formula: M = P[r(1+r)^n]/[(1+r)^n–1], where P is the loan amount, r is the monthly interest rate, and n is the number of payments. Additional costs like property tax, insurance, PMI, and HOA are added on top. Use our mortgage calculator to instantly see your payment.
Private Mortgage Insurance (PMI) is required on conventional loans when your down payment is less than 20% of the home price. It typically costs 0.5%–1.5% of the loan amount per year and can be removed once you reach 20% equity. FHA loans have their own mortgage insurance premium (MIP) regardless of down payment.
A 15-year mortgage has higher monthly payments but builds equity faster and saves significant interest over the life of the loan. A 30-year mortgage offers lower monthly payments and more cash flow flexibility. Use our loan comparison calculator to see the exact difference for your situation.
The interest rate is the base cost of borrowing. APR includes the interest rate plus lender fees, points, and other costs — giving a more accurate picture of the loan's true cost. Always compare APRs when shopping lenders. Use our APR calculator to find the true cost of your loan.
ARMs offer lower initial rates but carry payment risk after the fixed period ends. A 5/1 ARM is fixed for 5 years, then adjusts annually. If rates rise significantly, your payment could jump hundreds of dollars. Use our ARM calculator to model best and worst-case scenarios before choosing.
Paying every two weeks results in 26 half-payments per year — equivalent to 13 full monthly payments instead of 12. That one extra payment per year is applied to principal, reducing your balance faster and saving significant interest. Use our biweekly calculator to see how much you'd save.
Buying generally wins long-term when you stay in a home 5+ years, home prices appreciate, and your rent would otherwise keep rising. The Rent vs Buy calculator accounts for equity growth, maintenance costs, opportunity cost on the down payment, and annual rent increases.
Most conventional loans require a minimum score of 620. FHA loans accept scores as low as 580 (or 500 with a 10% down payment). VA and USDA loans don't have a strict minimum but lenders typically want 620+. Higher scores unlock better rates and terms — a 760+ score typically gets the best available rate.
A common guideline is that your total housing costs (PITI — principal, interest, taxes, insurance) should not exceed 28% of your gross monthly income. Total debt payments should stay under 36–43%. Use our affordability calculator to get a personalized estimate based on your income and debts.
Buying discount points makes sense if you plan to stay in the home long enough to break even on the upfront cost. One point costs 1% of the loan amount and typically reduces your rate by 0.25%. Use our mortgage points calculator to find your break-even month.
Yes, mortgage interest is generally tax-deductible if you itemize deductions. You can deduct interest on up to $750,000 of mortgage debt ($375,000 if married filing separately). Use our tax savings calculator to estimate your annual deduction.
Refinancing makes sense when you can lower your rate by at least 0.5–1%, plan to stay in the home past the break-even point on closing costs, or want to shorten your loan term. Use our refinance calculator to see your exact savings and break-even timeline.