Mortgage

A mortgage is one of the largest financial commitments most people will ever make. On a $400,000 home with 10% down, you'd borrow $360,000. At a 7% interest rate on a 30-year fixed mortgage, your monthly principal and interest payment would be approximately $2,395—and you'd pay roughly $502,200 in total over the life of the loan, meaning about $142,200 in interest.

Mortgages come in many forms: fixed-rate loans keep your payment stable for the entire term, while adjustable-rate mortgages (ARMs) start with a lower rate that can change after an initial period. Government-backed options like FHA, VA, and USDA loans offer lower down payments and more flexible qualifying standards than conventional loans. You can obtain a mortgage through a direct lender—such as a bank, credit union, or mortgage company that funds loans with its own capital—or through a mortgage broker who shops your application to multiple wholesale lenders.

Beyond the loan itself, your monthly mortgage payment typically includes property taxes and homeowners insurance held in an escrow account, plus private mortgage insurance (PMI) if your down payment is less than 20%. Understanding the full cost—not just the interest rate—is essential before committing.