Investment Property Mortgage Calculator

Estimate the full monthly cost of a mortgage on a rental property or a home, then see how that payment moves your debt-to-income ratio. Enter the price, down payment, rate, term, taxes, insurance, HOA dues, your other monthly debts, and gross income. For a rental, also enter the expected rent, your own housing payment, and whether you have landlord experience. The calculator returns principal and interest, PMI, total PITIA, the rental's net income or shortfall, back-end DTI (plus front-end DTI for a home you will live in), and lifetime interest.

What does this calculator tell you?

It answers two questions at once: what the property will cost you each month (PITIA: principal, interest, taxes, insurance, association dues) and whether that payment fits under typical lender DTI limits. On the default inputs — a $350,000 rental with 20% down at 7.5% for 30 years, $2,600 of expected rent, an $1,800 payment on your own home, and $8,000 of monthly income — the payment is $2,432.80 a month and back-end DTI is 34.79%.

The results are estimates for informational purposes only. Your lender's rate, fees, PMI quote, tax escrow, and DTI method will differ, so treat the output as a planning number, not a loan approval.

The inputs, and what to type in each

Two of these deserve extra care. Property tax in many states resets to the purchase price when the property sells, so the seller's bill can understate your cost. And when you buy a rental while you live elsewhere, your own housing payment stays in your debts in full; the calculator has a separate field for it so it is not mixed into "Other monthly debts."

How the math works

Principal and interest

The calculator uses the standard fixed-rate amortization formula:

M = P × [r(1 + r)^n] ÷ [(1 + r)^n − 1]

• P is the loan amount (price minus down payment)
• r is the monthly rate (annual rate ÷ 12)
• n is the number of payments (years × 12)

With P = $280,000, r = 0.075 ÷ 12 = 0.00625, and n = 360, the payment is $1,957.80. Over 360 payments you pay $704,808 in total, so lifetime interest is $424,808.

PMI

If the down payment is under 20%, the tool adds PMI at 0.8% of the loan per year. On a $297,500 loan (15% down on $350,000) that is $297,500 × 0.008 ÷ 12 = $198.33 a month. Real PMI pricing depends on credit score, loan-to-value, and occupancy, and investment-property mortgage insurance usually costs more than the same coverage on a home you live in. Replace the estimate with a quote when you have one.

PITIA and the two DTI ratios

PITIA = principal and interest + (annual tax ÷ 12) + (annual insurance ÷ 12) + HOA + PMI.

For a primary residence:

• Front-end DTI = PITIA ÷ gross monthly income
• Back-end DTI = (PITIA + other monthly debts) ÷ gross monthly income

For an investment property, the calculator follows Fannie Mae's subject-property rental income rule:

• Net rental income = expected rent × 75% − PITIA
• If it is negative, the shortfall is added to your debts
• If it is positive, it is added to income only with 12 months of landlord experience; otherwise it only cancels the payment
• Back-end DTI = (your own housing payment + other monthly debts + any rental shortfall) ÷ (gross income + any counted rental income)

The 25% haircut on rent stands in for vacancy and upkeep. The CFPB defines DTI as all monthly debt payments divided by gross monthly income, and notes that limits vary by loan product and lender.

Worked example: the default inputs line by line

At 34.79% the ratio sits inside the 36% manual-underwriting limit, so the badge is green. Without the rent, the full $2,432.80 would count as a debt and DTI would be 59.16%, above every Fannie Mae limit. That is why the rent figure matters so much for a rental.

If the rent were $3,400, 75% of it ($2,550) would exceed the PITIA by $117.20. A first-time landlord gets no income credit for that surplus, so DTI is $2,300 ÷ $8,000 = 28.75%. With 12 months of landlord experience the $117.20 is added to income and DTI is $2,300 ÷ $8,117.20 = 28.33%.

The same loan on a home you will live in

Switch the loan type to "Primary Residence" and the new payment becomes your housing payment. Front-end DTI is $2,432.80 ÷ $8,000 = 30.41% and back-end DTI is ($2,432.80 + $500) ÷ $8,000 = 36.66%, just over the 36% line, so both badges show caution.

How do down payment choices change the payment?

Same $350,000 rental, same 7.5% rate and 30-year term, same $2,600 rent, $1,800 own housing payment, $8,000 income, and $500 of other debts:

Going from 15% to 20% down lowers the payment by $320.70 a month, and most of that ($198.33) is PMI. Going from 20% to 25% saves another $122.36. On a rental, those monthly savings flow straight into cash flow, so the extra down payment earns a return roughly equal to the loan rate plus whatever PMI it removes.

What lenders actually require for investment property loans

Agency guidelines set the outer limits. Lenders can add stricter "overlays" on top.

Two points surprise many first-time investors:

1. There is no separate, lower agency DTI cap for rentals. Fannie Mae's 50% (DU) and 36%–45% (manual) limits apply to the whole application. The difference is in what goes into the ratio: your own housing payment counts in full, and the new rental adds either net rental income or a net loss.
2. Rent from the property you are buying can offset its payment. On a purchase, Fannie Mae has the lender multiply gross monthly rent by 75% and subtract the subject property's PITIA. A negative result is added to debts; a positive result is added to income if you have 12 months of property management experience. This calculator applies that rule. To model several existing rentals at once, use the real estate investor DTI and borrowing power calculator.

How to read the DTI badges

The badges are the tool's guidance, built around the Fannie Mae limits in the table above:

Green means the ratio fits even the strictest agency path, manual underwriting at 36%. Yellow means you are relying on Desktop Underwriter approval, which allows up to 50%, or on manual underwriting with the credit score and reserves needed to reach 45%. Red is above Fannie Mae's maximum. The 28% front-end mark is a long-standing rule of thumb, not an agency limit, and the calculator does not show a front-end ratio for rentals because agencies do not use one. Individual lenders can apply stricter overlays, especially for investors with several financed properties.

How rate and term change total cost

On the $280,000 loan from the example:

Each half-point adds roughly $95 a month and $34,000 of lifetime interest. A quarter point on a $350,000 loan is worth $59.63 a month, or $21,468 over 30 years — a useful number when deciding whether to pay discount points.

A 15-year term at the same 7.5% raises P&I to $2,595.63, an extra $637.83 a month, but cuts lifetime interest from $424,808 to $187,214. On the default rental, though, the bigger payment widens the rent shortfall to $1,120.63 and pushes back-end DTI from 34.79% to 42.76%. Investors who need the qualifying room often take the 30-year loan and prepay voluntarily instead.

Investment-property loans are usually priced above owner-occupied loans because agencies charge loan-level price adjustments for non-owner occupancy. Get a quote specifically for an investment purchase before you plug in a rate.

PMI on a rental: what is different

Under the Homeowners Protection Act, as the CFPB explains, you can ask to cancel PMI when the scheduled balance reaches 80% of original value, and the servicer must end it automatically at 78%. Those rules cover single-family principal residences. On an investment property, cancellation follows the loan investor's and servicer's policies, which can require a new appraisal and a seasoning period. Budget for PMI to last longer on a rental than it would on your home, or put 20% down and skip it.

Ways to bring a high DTI down before you apply

• Pay off a small installment loan. Retiring a $400 car payment lowers back-end DTI by 5 points on $8,000 of income, from 34.79% to 29.79% on the default rental.
• Raise the down payment. On the default rental, 25% down cuts back-end DTI from 34.79% to 33.26%, because a smaller PITIA shrinks the rent shortfall.
• Document the rent. A lease or an appraiser's market-rent schedule lets 75% of the rent offset PITIA; a rent the appraiser will not support gets cut to the lower figure.
• Shop insurance and verify taxes. A $600-a-year insurance difference is $50 a month of PITIA.
• Choose the 30-year term for qualifying, then prepay if cash flow allows.

Before you rely on the payment

Check that the payment works for the property, not only for the lender. Run the rent, vacancy, maintenance, and payment through the US rental property ROI calculator to see cash flow and debt service coverage. Then check the after-tax picture with the rental after-tax cash flow calculator, since depreciation and mortgage interest change what you keep.

For the full qualification walkthrough — down payment, reserves, rent credit, and a worked borrower file — read how much mortgage you can afford for an investment property. For the monthly breakdown of any loan, the amortized loan calculator shows each payment's interest and principal split. If you already own the rental and rates have fallen, compare your options with the mortgage refinance calculator.