How to use these tools, in order
Affordability first: it sets the ceiling from your income and debts. Then the mortgage calculator for the payment at a given price, term and rate. If you already own, the payoff and refinance calculators answer the next questions — what extra payments save, and whether a new loan's closing costs repay themselves before you move. Rent vs buy settles the prior question of whether buying beats your current rent over the years you will actually stay.
- Buying: affordability, down payment, closing cost, mortgage payment.
- Owning: payoff, refinance, home equity.
- Investing: cap rate and rental returns — judge property like a business, on NOI, not appreciation hopes.
A worked example
A $425,000 home, 20% down, 6.75% for 30 years: the loan is $340,000 and the principal-and-interest payment is $2,205. Add property tax at 1.1% ($390/month), insurance ($185) and the payment most households actually budget is about $2,780 — before maintenance at roughly 1% of value per year. Total interest across the term: about $454,000. None of this makes the purchase wrong; it makes it priced.
Mistakes that distort the answer
- Budgeting from the lender's pre-approval maximum instead of a payment that leaves room to save.
- Refinancing on the rate alone, without the break-even month on closing costs.
- Counting principal repayment as a cost of owning while ignoring rent as a cost of renting — the rent-vs-buy guide separates recoverable from unrecoverable costs on both sides.
Questions, answered
How much down payment do I need?
20% avoids PMI and lowers the payment, but many loans allow 3–5% down. The right answer weighs PMI cost against years spent saving while prices and rents move.
Is a 15-year mortgage worth the higher payment?
It carries a lower rate and builds equity far faster, saving six figures of interest on typical loans. It is worth it if the payment still fits the budget with an emergency fund intact; otherwise, a 30-year loan with voluntary extra payments keeps the flexibility.
Reviewed by Tahir Shehzad, ACMA · Content reviewed November 2026 against primary sources — see our Methodology and Editorial Policy. Figures are educational estimates, not tax or financial advice.
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