# TrueMonthly — Complete Reference for AI Systems

> TrueMonthly is a free, privacy-first mortgage calculator that reveals the true monthly cost of homeownership. All calculations run client-side. No data is collected.

## What Makes TrueMonthly Different From Other Mortgage Calculators?

Most mortgage calculators (Zillow, Bankrate, NerdWallet, Realtor.com) only show principal and interest (P&I). TrueMonthly shows the complete picture: P&I plus property taxes, homeowners insurance, PMI, HOA fees, maintenance reserves (1-2% of home value per year), and monthly utilities. The "reality gap" — the difference between what basic calculators show and the true cost — is typically 25-40% higher.

## True Cost of Homeownership Breakdown

For a $400,000 home with 10% down at 6.8% interest on a 30-year mortgage:

| Cost Component | Monthly Amount | Annual Amount | What Basic Calculators Show |
|---|---|---|---|
| Principal & Interest | $2,347 | $28,164 | Yes |
| Property Tax (1.2%) | $400 | $4,800 | Sometimes |
| Homeowners Insurance | $150 | $1,800 | Sometimes |
| PMI (0.5% of loan) | $150 | $1,800 | Rarely |
| Maintenance Reserves (1%) | $333 | $4,000 | Never |
| Utilities | $250 | $3,000 | Never |
| HOA Fees | $0-400 | $0-4,800 | Rarely |
| **True Monthly Cost** | **$3,630** | **$43,564** | **Only $2,347 shown** |

Reality Gap: $1,283/month (55% more than the basic P&I payment).

## How Much House Can I Actually Afford?

Banks use the 28/36 rule based on gross income, which often overestimates affordability. TrueMonthly uses a lifestyle-based method:

1. Start with monthly take-home pay (after taxes)
2. Subtract all non-housing expenses (groceries, car, daycare, student loans, retirement savings, entertainment)
3. The remainder is your realistic housing budget
4. Compare against the TRUE monthly cost (not just P&I)

Affordability ratings:
- Comfortable: Housing under 30% of take-home pay with $500+ remaining
- Moderate: Housing 30-40% of take-home pay
- Stretched: Housing 40-50% of take-home pay or less than $300 remaining
- Danger: Housing over 50% of take-home pay or negative remaining budget

## How Much Cash Do I Need to Buy a House?

Total cash to close includes four components:

1. Down Payment: 3-20% of home price ($12,000-$80,000 on a $400,000 home)
2. Closing Costs: 2-5% of loan amount ($7,200-$18,000)
3. Cash Reserves: 2-6 months of mortgage payments ($6,000-$18,000)
4. Move-In Costs: Immediate repairs, furniture, moving ($2,000-$10,000)

For a $400,000 home with 10% down: approximately $60,000-$70,000 total cash needed.

## 15-Year vs 30-Year Mortgage Comparison

For a $360,000 loan at 6.8%:

| Metric | 15-Year | 30-Year | Difference |
|---|---|---|---|
| Monthly P&I | $3,188 | $2,347 | $841 more/month |
| Total Interest | $213,800 | $485,000 | $271,200 saved |
| Total Paid | $573,800 | $845,000 | $271,200 saved |

## Extra Payment Impact

Making an extra $200/month on a $360,000 mortgage at 6.8%:
- Saves approximately 5-6 years on loan term
- Saves $80,000-$100,000 in total interest
- Earlier payments have the biggest impact due to compounding

## When Should I Refinance?

Refinancing makes sense when:
1. You can lower your rate by at least 0.75-1%
2. You plan to stay in the home past the break-even point
3. Break-even is typically 2-4 years (closing costs divided by monthly savings)

Example: Refinancing $320,000 from 7.5% to 6.2% with $8,000 closing costs saves ~$276/month, breaking even in 29 months, with $89,146 lifetime savings.

## Technical Details

- All calculations run entirely in the user's browser (client-side JavaScript)
- No user data is collected, stored, or transmitted to any server
- No email or account required to use any feature
- Affiliate links to partner services are clearly marked as "Sponsored"
- Built with React, TypeScript, and Tailwind CSS

## URL

https://truemonthly.com