Mortgage Calculator

What goes into a mortgage payment

A monthly house payment is often called PITI: principal, interest, property taxes and homeowners insurance. Many loans also add HOA dues and private mortgage insurance (PMI) when the down payment is under 20%.

Monthly P&I = L × r ÷ (1 − (1 + r)^−n)

L is the loan amount (home price minus down payment), r is the annual rate ÷ 12 and n is the number of monthly payments (360 for 30 years).

Worked example

A $400,000 home with 20% down gives a $320,000 loan. At 6.5% for 30 years, r = 0.065 ÷ 12 and n = 360, so principal and interest come to $2,022.62 a month. Adding 1.1% property tax ($366.67 a month) and $1,500 a year of insurance ($125 a month) brings the total to about $2,514.28. Over 30 years you would pay about $408,142 in interest.

15-year vs 30-year mortgage

A 15-year loan has a higher monthly payment but usually a lower rate and far less total interest. A 30-year loan keeps the payment lower, which leaves more room in your budget. Try both terms above to compare.

How to lower your payment

• Put down 20% or more to avoid PMI.
• Improve your credit score before applying to qualify for a lower rate.
• Compare offers from several lenders using the APR, which includes fees.
• Check whether your property tax rate or insurance premium can be reduced.

This calculator gives estimates for planning only. Your lender will provide official figures, which can differ because of fees, escrow rules, rate locks and local taxes.

Frequently asked questions

How is a monthly mortgage payment calculated?

Principal and interest use the formula L × r ÷ (1 − (1 + r)^−n). Property tax, insurance, HOA dues and PMI are then added to get the full monthly payment.

What is PMI and when does it go away?

Private mortgage insurance protects the lender on conventional loans with less than 20% down. You can usually ask to cancel it at 20% equity, and it typically ends automatically at 22%.

How much house can I afford?

Many lenders want total monthly debts, including the new mortgage, to stay below about 43% of gross income. Use the debt-to-income calculator to check.

Does the calculator include closing costs?

No. Closing costs are paid upfront, often 2–5% of the loan amount, and are not part of the monthly payment.

Why is most of my early payment interest?

Interest is charged on the remaining balance, which is largest at the start. As the balance falls, more of each payment goes to principal.