Mortgage Calculator

Buying a $400,000 home with 20% down ($80,000) on a 30-year loan at 6.5% works out to about $2,022 per month in principal and interest - and once you add property tax, home insurance, and HOA, the real number lands closer to $2,600. That gap between "principal and interest" and the full monthly payment is exactly why this mortgage calculator includes taxes, insurance, and PMI: it shows the number that actually leaves your bank account each month.

How the monthly payment is calculated

The principal-and-interest portion uses the standard amortization formula:

where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (years × 12). Your full monthly payment then adds 1/12 of annual property tax, 1/12 of annual home insurance, PMI if your down payment is under 20%, and any HOA dues.

What is PITI?

PITI = Principal + Interest + Taxes + Insurance. Lenders evaluate your total PITI (plus PMI and HOA) against your income to decide how much you can borrow. As a rule of thumb (the 28/36 rule), many lenders want housing costs under 28% of gross monthly income and total debt under 36%. To turn that ratio into a price range, run your salary through the Home Affordability Calculator.

Private mortgage insurance (PMI)

If your down payment is less than 20%, conventional loans usually require PMI, typically 0.3%-1.5% of the loan per year. Under the federal Homeowners Protection Act, your lender must automatically cancel PMI when the balance reaches 78% of the original home value, and you can request cancellation at 80%. The calculator estimates the month this happens.

15-year vs 30-year mortgage

A 30-year term keeps monthly payments low but you pay far more interest overall. A 15-year term has higher monthly payments and a lower rate, saving tens of thousands in interest. Switch the term in the calculator to compare the total interest side by side.

Lower your payment

• Larger down payment: reduces the loan and can remove PMI entirely at 20%.
• Better rate: even 0.5% lower meaningfully cuts the monthly payment - shop multiple lenders.
• Longer term: lowers the monthly payment but raises total interest.
• Extra principal: paying a little more each month shortens the loan - see the Mortgage Payoff Calculator.

How to use this mortgage calculator

You only need a handful of numbers to get a realistic estimate. Work through the fields in order:

1. Home price: enter the purchase price or your target budget for the property.
2. Down payment: type the cash amount or percentage. The calculator subtracts this to find your loan amount and uses it to decide whether PMI applies.
3. Interest rate: use a current quoted rate. If you have not been pre-approved yet, a recent national average for your loan type and credit tier is a good placeholder.
4. Loan term: pick 30, 20, or 15 years. Switch between them to see how the payment and total interest change.
5. Property tax & insurance: add your annual property tax (or a county estimate) and a yearly homeowners insurance figure. These are spread across 12 months.
6. PMI & HOA: if your down payment is under 20%, include a PMI rate; add any monthly HOA dues if the property has them.

The result updates instantly. Read the full monthly payment (PITI) at the top, then scroll the amortization schedule to see how each payment splits between principal and interest over the life of the loan.

Who this calculator is for

This tool is built for anyone trying to turn a list price into a real monthly number. That includes:

• First-time buyers checking whether a price range fits their budget before they tour homes.
• Move-up buyers comparing a new payment against their current one.
• Refinancers who want a quick baseline before running the dedicated Refinance Calculator.
• House hunters sanity-checking a listing's "estimated payment," which often omits taxes, insurance, and PMI.
• Anyone budgeting who wants to know the true cost of homeownership, not just the loan payment.

A second worked example: 10% down with PMI

Say you buy a $300,000 home with 10% down ($30,000), leaving a $270,000 loan on a 30-year term at 6.5%. The principal-and-interest payment is about $1,706 per month. Because your down payment is below 20%, PMI applies - at roughly 0.5% of the loan per year that adds about $113 per month. Add, say, $300/month for property tax and $100/month for insurance, and the full PITI is close to $2,219. Once the loan balance drops to 80% of the original value (around $240,000), you can request that the lender drop the PMI, lowering the payment to about $2,106. This is why two buyers with the "same" loan can have very different first-year payments.

Scenario comparison: same home, different choices

Using a $400,000 home as the baseline, here is how three common choices change the principal-and-interest payment and lifetime interest (rates and taxes held constant for illustration):

• 20% down, 30-year at 6.5%: about $2,022/month, with roughly $408,000 in total interest over the life of the loan.
• 20% down, 15-year at 5.9%: about $2,683/month, but only around $162,000 in total interest - a much higher monthly cost in exchange for huge long-term savings.
• 10% down, 30-year at 6.5%: about $2,275/month in P&I plus PMI, because you are financing a larger balance and paying mortgage insurance until you reach 20% equity.

The takeaway: the headline rate is only one lever. Term length and down payment often move your total cost more than a fraction of a percent on the rate.

Key mortgage terms explained

• Principal: the amount you actually borrow (home price minus down payment). Each payment chips away at it.
• Amortization: the schedule that splits every payment into interest and principal. Early payments are mostly interest; later ones are mostly principal.
• Escrow: an account your servicer often uses to collect and pay your property tax and insurance, which is why those costs show up in your monthly bill.
• LTV (loan-to-value): your loan balance divided by the home value. PMI cancellation is tied to LTV reaching 80% (request) and 78% (automatic).
• Fixed vs. adjustable rate: a fixed-rate loan keeps the same rate for the whole term; an adjustable-rate mortgage (ARM) can change after an introductory period. This calculator assumes a fixed rate.
• Points: optional upfront fees (1 point = 1% of the loan) you can pay to lower your rate. They are not included in the monthly payment here.

What changes the result the most

If you tweak the inputs and watch the payment move, you will see that a few factors dominate:

• Loan amount: the single biggest driver - a smaller price or larger down payment lowers everything.
• Interest rate: on a 30-year loan, each 1% of rate changes the payment by roughly 10-12%.
• Term length: moving from 30 to 15 years raises the monthly payment sharply but slashes total interest.
• Property tax rate: ranges from under 0.4% to over 2% of value by county, so local rates matter a lot.
• PMI: applies only under 20% down and disappears once you build enough equity.

How the result is used in real life

The full PITI number from this calculator is what lenders compare against your income when they apply the 28/36 rule, and it is the figure you should put in your household budget - not the smaller principal-and-interest quote. It also helps you decide how much cash to keep in reserve: lenders typically want to see a few months of payments in savings after closing. When you make an offer, having a realistic monthly number keeps you from stretching into a payment you cannot comfortably carry once taxes and insurance are layered on.

Upfront cash: down payment plus closing costs

The monthly payment is only half of the affordability picture. To close on a home you also need cash on hand, and it is more than just the down payment. Closing costs typically run about 2% to 5% of the loan amount and cover items such as the loan origination fee, appraisal, title insurance, recording fees, and prepaid property tax and insurance for your escrow account. On a $320,000 loan that is roughly $6,400 to $16,000 due at closing, on top of your down payment. Lenders also want to see cash reserves left over - often two to six months of PITI - so a foreclosure scare or a job gap does not immediately put the mortgage at risk. When you budget, add the down payment, estimated closing costs, and a reserve cushion together; the calculator focuses on the recurring monthly cost, but the one-time cash hurdle is what trips up many otherwise-ready buyers. If saving the down payment is the bottleneck, the Down Payment Calculator helps you set a monthly savings target and timeline.

What actually sets your interest rate

The rate you plug into this calculator is not a single national number - it is personalized. Lenders price your loan from several inputs: your credit score (higher scores earn lower rates, with the best pricing usually starting around 740+), the loan-to-value ratio (a bigger down payment lowers risk and often the rate), the loan type and term (15-year fixed rates run below 30-year, and government-backed FHA, VA, and USDA loans price differently from conventional), and broader market conditions tied to the 10-year Treasury yield and Federal Reserve policy. You can also buy discount points to lower the rate, paying more upfront for a smaller monthly payment - the Mortgage Points Calculator shows whether the break-even period makes that worthwhile. Because two borrowers buying the same house can be quoted very different rates, treat any "average rate" headline as a starting estimate and confirm with a real quote before you lock.

Limitations and assumptions

This calculator is a planning estimate, not a loan quote. Keep these assumptions in mind:

• It assumes a fixed interest rate for the entire term; it does not model ARM rate adjustments.
• It does not include closing costs, lender fees, discount points, or prepaid items, which are paid at or before closing rather than monthly.
• Property tax and insurance are treated as level, but both typically rise over time as assessments and premiums increase.
• It does not account for the mortgage interest tax deduction or any state and local incentives, which can lower your effective cost.
• Your actual rate depends on credit score, loan type, debt-to-income ratio, and the lender - shop several to compare real offers.

How it compares to related calculators

This page answers "what is my monthly payment on this home?" If you have a different question, a sister tool fits better:

• To find your maximum price from your income, use the Home Affordability Calculator.
• To see how extra payments shorten the loan and cut interest, use the Mortgage Payoff Calculator.
• To compare your current loan against a new one, use the Refinance Calculator.
• To plan a savings target for your down payment, use the Down Payment Calculator.
• For a detailed payment-by-payment breakdown, use the Amortization Calculator.
• To weigh paying for a lower rate, use the Mortgage Points Calculator; to cut interest with split payments, try the Biweekly Mortgage Calculator.

Sources

• Consumer Financial Protection Bureau (CFPB) - Owning a Home: mortgage basics and the closing process.
• Consumer Financial Protection Bureau (CFPB) - What is private mortgage insurance (PMI)?
• U.S. Department of Housing and Urban Development (HUD) - Buying a Home.
• Homeowners Protection Act of 1998 (federal PMI cancellation at 78%/80% LTV).