Model version 1. Source references checked September 11, 2026. This page describes the implemented model, not every mortgage product or legal requirement.
Payment and amortization
For principal P, monthly rate r = annual note rate / 1,200 and n monthly payments, the scheduled payment is P × r / (1 − (1 + r)−n). At a zero rate it is P / n. Calculations keep full precision internally, using a numerically stable equivalent formula. Displays round to dollars or cents.
Interest is opening balance × r. Scheduled principal is the payment less interest. Extra principal is applied afterward and capped at the remaining balance. Annual extras occur every twelfth payment. The first payment month is explicit. Payment dates are month labels, not contractual due dates. There is no daily accrual, recasting, penalty, balloon or interest-only period.
Recurring costs
Property tax = price × entered annual tax percentage / 1,200. Insurance is the entered annual amount / 12. HOA is monthly. All remain constant. These costs continue after payoff even though the exported loan schedule stops. Maintenance, utilities, assessments and future increases are excluded.
Conventional PMI
PMI begins only when the modeled original LTV exceeds 80% and borrower-paid PMI is enabled. Its premium is the original loan × annual PMI rate / 1,200. Automatic mode stops charging on the original scheduled 78% payment date, or the month after the original term midpoint, whichever is earlier. Request mode assumes approval for the payment after actual balance reaches 80%, if earlier. Payments are assumed current. Purchase price is used as original value. Servicer timing, lower appraisals and other eligibility requirements can change actual results. See the linked CFPB reference below.
Closing cash
Points = original principal × entered points / 100. Eligible fees = closing fees + points. Credits are capped at those fees. Cash required = down payment + net fees + prepaids. Cash still due subtracts the paid deposit, with a floor of zero. This simplified model excludes seller credits, prorations, refund mechanics and other transaction-specific adjustments. Escrow is not charged again as an expense in horizon-cost comparisons.
Comparisons and refinancing
Purchase horizon cost includes interest, PMI, recurring property costs and net closing fees. Principal, down payment and escrow deposits are not treated as nonrecoverable costs. Refinance cash-flow savings equal old cumulative loan payments minus new cumulative payments and upfront fees. Balance-adjusted savings add the old remaining balance and subtract the new remaining balance. Financed fees increase the new loan. Break-even is the first favorable crossing, not a guarantee of later savings.
Affordability
Monthly housing budget is the larger of zero and the smaller of (gross monthly income × housing DTI) or (gross monthly income × total DTI − other monthly debt). The home-price ceiling is the lower of the price supported by this payment and the price supported by available cash after reserves, closing fees and prepaids. Percentage down payments make carrying cost linear in price. The model is capped at a $100 million price.
Outside the model
Government-loan fees and mortgage insurance, ARM adjustments, regulatory APR, investor eligibility, taxes and deductions, appreciation, sale costs, refinancing predictions and returns on invested cash are not modeled. Inputs are not live market data. Outputs are not lending or investment recommendations.
Source references: CFPB: When can I remove private mortgage insurance? CFPB: Loan Estimate explainer CFPB: Interest rate versus APR CFPB: Lender credits and discount points
Sources checked 2026-09-11. Educational software; no professional review claimed.