USDA loans help first-time home buyers — and we’re not just talking about farmers and ranchers. The agency’s Rural Development Program covers a lot of ground, from rural acres that are fit to farm to suburban lots perfect for porches.

While no-down-payment loans are the main draw, low interest rates and even grants for qualified home buyers sweeten the deal.

Our USDA mortgage calculator can help you run the numbers to see if the home you’ve got your eye on fits your monthly budget.

How we got here

What’s behind the numbers in our USDA mortgage calculator

No mortgage calculator will get down to the dime on what your monthly payment will truly be — too many variables are subject to change. Your homeowners insurance premium might end up being more than you expect, or maybe you’ll get a slightly different interest rate than the one you’re inputting.

But the NerdWallet USDA loan payment tool is a true PITI mortgage calculator, which means we include principal and interest. We take the process a step further and consider taxes and insurance, too.

The amounts factored in for taxes and insurance are estimated, but it’s a lot more accurate than not considering them at all.

Even more importantly, we add the mortgage insurance premium — the USDA calls it a guarantee fee — into the payment calculation. The USDA requires a monthly insurance premium of 0.35% of the cost of your total loan, to help the government defray the cost of loans that default.

How to use the USDA mortgage calculator

First off, a big pat on the back for all the research you’re doing. Using our USDA mortgage calculator helps you confidently decide just how much house you can afford.

Step-by-step, here’s how the NerdWallet USDA home loan calculator works:

  1. Input the purchase price of the home you’re considering or your best guess of how much house you can afford.

  2. USDA loans usually don’t require a down payment, but you can enter a figure here if you are considering putting some money down. Zero works too.

  3. Next, enter the interest rate you expect to qualify for. Our mortgage rate tool can help you pin that number down.

  4. Finally, select how long your repayment term will be — 15 or 30 years.

The results will show your total monthly cost and the total cost of the loan over the term you selected.

You can also choose to break down the monthly or total costs in detail. Now that you have a good idea of what your loan will cost, you’ll be ready to shop for the best USDA lender for your particular situation.

There are a few other considerations:

  • What loan term should I choose? A lot of people default to a 30-year USDA loan for no other reason than their monthly payment will be lower. However, if this is a starter home or you expect to move in five years or so, a 15-year term might be something to consider. It’s likely you’ll build equity in your home faster with a shorter term — and with a USDA loan’s lower interest rate, you might find the monthly payment fits your budget after all.

  • What about an adjustable rate mortgage? If you are looking for an ARM, a USDA mortgage might not be for you. There are no adjustable-rate mortgages on the USDA menu. You can only choose from two flavors, both fixed: 15- and 30-year loans.

  • Does this home fit my budget? The last thing you want is a monthly payment surprise. Our USDA home mortgage calculator includes some of the “hidden costs” in a mortgage, including taxes and insurance — as well as the USDA guarantee fee. Remember though, these costs are estimated. You’ll probably want to leave a little cushion in your budget.

  • Should I make a down payment? You’re frowning right now, aren’t you? Make a down payment? It’s a USDA loan; I didn’t think I needed a down payment. This is a calculator; play with a few scenarios, perhaps including one where you put a small amount down. It will reduce the total interest you pay over the long haul and lower your monthly payment, as well.

USDA mortgage monthly payment 101

What are the monthly costs built into a USDA mortgage payment?

Many mortgage calculators consider only principal and interest. Here is what’s behind the curtain with the NerdWallet USDA mortgage payment calculator:

  • Principal: This is your loan amount. If you make a down payment, that’s subtracted from your principal.

  • Interest: The cost of borrowing the money, shown as a percentage rate. If you look at the breakdown of total costs, you’ll see the amount of interest paid over the life of the loan.

  • The USDA guarantee fee: Often referred to as “mortgage insurance,” this is an upfront fee — and monthly premium — collected by the USDA. It helps the government defray the costs of borrowers who default on their loans.

  • Property taxes: Often assessed annually, this is an estimated amount of tax. It’s usually built into your payment and drawn from an escrow account. This calculator assumes that tax will be 1% of the property value each year, but the actual amount you’ll pay could be higher or lower depending on where you live.

  • Homeowner’s insurance: Borrowers require you insure your home, and this is an estimate of that cost. We’re assuming 0.3% of the home’s value each year, but the amount could be different based on your specific situation.

Can I lower my USDA monthly payment?

The best use of the USDA mortgage calculator is the reality check it provides. If it’s showing a monthly mortgage payment outside of your comfort zone, you can:

  • Extend the loan term: Moving from a 15-year loan to a 30-year term will lower your monthly payment. You’ll pay more interest over the life of the loan, but you can always refinance to a shorter term when you’re able to afford a higher monthly payment.

  • Shorten your wish list: You may have to buy a smaller house and trim your “must-have” list of amenities. More modest expectations usually come with a smaller price tag. Besides, you can always renovate your home and update its amenities later.

  • Put money down: Even though USDA mortgages usually require no down payment, you can lower the monthly bite it takes out of your budget by reducing the size of your loan. This will also reduce the upfront and ongoing USDA guarantee fee.

  • Shop for a better interest rate: Don’t stop with your first loan approval. With the confidence that you are definitely mortgage-worthy, you can shop with two or three more USDA-approved lenders and see who gives you the best deal.

Can my USDA monthly payment go up?

If you’re loving the results you see from the USDA mortgage calculator, you’ll also want to know what could push your monthly payment higher.

  1. If your credit score dips between now and the time you get approved for a loan, your interest rate — and as a result, your payment — will go up. This is a good reason to wait on opening new lines of credit to buy furniture or a giant new flat-screen.

  2. The property taxes and homeowners insurance premiums shown here are estimates. They could be higher, and these costs will likely rise over time after you buy your home.

  3. Late mortgage payments will incur penalty fees that will be due in addition to your regular monthly payment.