Finance
Mortgage Payment Calculator
Enter your home price, down payment, rate, and term to estimate the full monthly payment — principal and interest plus property taxes, homeowners insurance, and PMI — and see total interest over the life of the loan.
Quick answer: Your monthly payment includes principal, interest, property tax, insurance, and PMI; a $320,000 loan at 6.5% over 30 years runs about $2,023/month before taxes and insurance.
How it works
1. Set the loan amount and rate
Subtract your down payment from the home price to get the loan principal. Combine it with your interest rate and term (usually 15 or 30 years). A larger down payment lowers both the principal and, if you reach 20% down, removes private mortgage insurance.
2. Amortize into principal and interest
The calculator computes a fixed monthly principal-and-interest (P&I) payment using the standard amortization formula. Early payments are mostly interest; over time the balance shifts toward principal. This is why extra principal payments early in the loan save the most interest.
3. Add the full PITI picture
Your real monthly housing cost is PITI: principal, interest, taxes, and insurance, plus PMI and any HOA dues. Property taxes and homeowners insurance are typically collected into an escrow account. Budgeting PITI rather than just P&I prevents a payment-shock surprise at closing.
Frequently asked questions
How is a monthly mortgage payment calculated?
Principal and interest use the standard amortization formula: M = P · r(1+r)^n / ((1+r)^n − 1), where r is the monthly rate and n is the number of months. Property tax, insurance, and PMI are added on top to get the full PITI payment.
When do I have to pay PMI?
Private mortgage insurance is usually required when your down payment is under 20%. This calculator estimates PMI at about 0.5% of the loan per year until you reach 20% equity.
How much house can I afford?
A common guideline is keeping total housing costs under 28% of gross monthly income. Use the monthly payment here against your budget to gauge affordability.
What is the difference between P&I and PITI?
P&I is just principal and interest — the loan repayment itself — while PITI adds property Taxes and homeowners Insurance to give your full monthly housing cost. Lenders qualify you on PITI (plus PMI and HOA dues), so always budget the larger PITI figure rather than the P&I-only payment.
How much house can I afford?
A common guideline is the 28/36 rule: keep your housing payment (PITI) at or below 28% of gross monthly income and total debt at or below 36%. On a $7,000 monthly income that is about $1,960 for housing. Lenders may stretch these limits, but staying under them leaves room for other expenses.
Should I choose a 15-year or 30-year mortgage?
A 15-year loan has higher monthly payments but a lower rate and far less total interest, while a 30-year loan has lower, more flexible payments but costs much more over time. A 15-year term can save tens of thousands in interest; choose it if the higher payment fits your budget comfortably.
When can I stop paying PMI?
Private mortgage insurance can usually be canceled once your loan balance reaches 80% of the home's original value, and lenders must automatically remove it at 78%. Paying down principal or rising home values can get you there faster. PMI applies to conventional loans with less than 20% down.
Does making extra mortgage payments save money?
Yes — extra payments applied to principal reduce the balance that interest is charged on, shortening the loan and cutting total interest. Because early payments are mostly interest, extra principal in the first years of a 30-year loan saves the most. Even one extra payment a year can shave several years off the term.