Buying a home in the US almost always means a mortgage. The terms and structure differ from a Korean home loan, so it's confusing at first. Why is a 30-year fixed the default? What are conforming, jumbo, and PMI? How much down do you really need? Here's a 2026 rundown.
The basic structure
Your monthly payment is often called PITI — Principal, Interest, Taxes, Insurance. Unlike Korea, US property taxes and insurance are usually collected monthly alongside the loan.
| PITI part | What it is |
|---|---|
| P — Principal | Paying down what you borrowed |
| I — Interest | Large share early on |
| T — Taxes | Property tax escrowed monthly |
| I — Insurance | Home insurance + PMI (if <20% down) |
Rates in 2026
As of July 2026: 30-yr fixed ~6.7%, 15-yr ~5.8%, jumbo ~6.8%, edging up. The Fed sits at 3.50–3.75%.
| Type | Feature | Best for |
|---|---|---|
| 30-yr fixed | Fixed rate, stable payment (~6.7%) | Long stay, stability |
| 15-yr fixed | Lower rate, less total interest, higher payment | Strong cash flow |
| ARM | Low intro rate, then adjusts | Short hold, expecting cuts |
New builds may come with rate buydowns (100–200bp). And if rates fall, you can refinance.
Conforming vs jumbo — 2026 limits
| Tier | 2026 limit (1-unit) | Note |
|---|---|---|
| Conforming baseline | $832,750 | Most areas, +$26,250 vs 2025 |
| High-cost area | Up to $1,249,125 | CA, NY, etc. |
| Jumbo | Above the limit | Higher rate, stricter terms |
Down payment and PMI
You don't need 20% — conventional loans start at 3%, FHA at 3.5%. But under 20% adds PMI, raising your monthly cost.
| Down payment | Effect |
|---|---|
| 20%+ | No PMI, lowest payment, best rate |
| 10–19% | PMI applies; drops at 78% LTV |
| 3–5% (conv.) | Lower entry, higher PMI/interest |
| 3.5% (FHA) | Lower credit OK, separate MIP |
Don't forget closing costs
Beyond the down payment, closing costs run about 2–5% of the price — appraisal, title insurance, prepaid taxes/insurance, and lender fees. So the cash you need is down payment + closing costs. On a $500,000 home, that's another $10k–$25k.
What affects approval
- Credit score (FICO) — usually 620+, best terms at 740+.
- DTI — debt-to-income typically under 43%.
- Cash reserves — including closing costs.
- Stable income — the core of underwriting.
Get pre-approved before shopping, and use a rate lock to hold your rate for a few weeks — helpful when rates are rising.
FAQ
30-year vs 15-year fixed?
15-year saves interest but costs more monthly; 30-year is lighter monthly but more total interest. Your cash flow decides.
Do I pay PMI forever?
No — conventional PMI auto-cancels at 78% LTV, and you can request removal at 80%.
Must I save 20% down?
No, 3–5% works. Weigh PMI cost vs waiting longer.
US mortgages are about the full PITI and the conforming/PMI structure — not just the rate. Run the numbers, and refinance later if rates fall.
This is general information, not lending advice. Rates, limits, and PMI vary by credit and lender. See also the 2026 US housing outlook and US property tax.
