How this mortgage calculator works
The principal-and-interest portion of your payment comes from three things: the loan amount (home price minus down payment), the interest rate, and the loan term. We use the standard amortization formula lenders use:
M = P × [ r(1+r)ⁿ ] / [ (1+r)ⁿ − 1 ]
where P is the loan amount, r is the monthly interest rate (annual ÷ 12), and n is the number of monthly payments (years × 12). Most calculators stop there — but principal and interest are only part of what you actually pay each month, so this one adds the rest.
Why we show the full payment (PITI), not just P&I
Lenders think in terms of PITI — Principal, Interest, Taxes and Insurance — because that is the real cost of owning the home. Quoting only principal and interest can make a house look 20–30% cheaper than it is. Fill in the optional fields on the left and the headline figure becomes your true monthly outlay:
- Property taxes — charged as a yearly percentage of the home's value and split across 12 months. Rates vary widely by location, so check your county's number.
- Homeowners insurance — required by virtually every lender; entered here as a yearly premium.
- PMI (private mortgage insurance) — added automatically when your down payment is under 20% of the price. It typically runs 0.3%–1.5% of the loan per year and drops off once you reach about 20% equity.
- HOA fees — monthly dues for some condos and planned communities.
A worked example
Say you buy a $400,000 home with $80,000 down (20%), a 6.5% rate over 30 years. Principal and interest come to about $2,023/month. Add 1.1% property tax (~$367/mo) and $1,500/yr insurance (~$125/mo) and your real payment is closer to $2,515/month — nearly $500 more than the P&I figure alone. Because you put 20% down, there is no PMI. Drop the down payment to 10% and PMI appears, adding roughly $150/month until you build equity back to 20%.
Why extra payments matter so much
Early in a mortgage, most of each payment goes to interest, not the balance. An extra amount each month goes straight to principal — cutting interest for the rest of the loan. Set an extra payment above and watch the total interest and payoff time drop. On the example loan, an extra $200/month pays the house off years early and saves tens of thousands in interest.
How much house can you afford?
The traditional 28/36 rule is one planning heuristic: housing near 28% of gross income and all debt near 36%. It is not a universal underwriting rule or a guarantee that the payment fits your after-tax budget. Adjust the home price until the full PITI figure is comfortable for your circumstances. Our guide How much house can you actually afford? walks through the missing costs and trade-offs.
Frequently asked questions
Is the interest rate the same as the APR?
Not exactly. The interest rate drives your monthly principal-and-interest payment, while the APR also folds in certain lender fees to reflect the true yearly cost of the loan. For estimating a payment, enter the quoted interest rate; compare APRs when shopping between lenders.
Should I choose a 15-year or 30-year term?
A 15-year loan has a higher monthly payment but a much lower total interest cost and builds equity faster. A 30-year loan keeps monthly payments low and flexible. Try both terms above and compare the "total interest" figure — the difference is often striking.
Does a bigger down payment always help?
A larger down payment lowers your loan amount, monthly payment, and total interest, and reaching 20% removes PMI. But don't drain your emergency fund to get there — lenders and financial advisers generally recommend keeping several months of expenses in reserve.
Tools that pair with this one
- Compound Interest Calculator — plan how long it takes to save your down payment, and what it grows to along the way.
- Loan Calculator — run the same payment math for a car, personal, or student loan.
- Discount Calculator — quickly work out price reductions on anything from closing-cost credits to furniture for the new place.
Estimates for educational purposes only — not financial advice. Actual rates, taxes, insurance, PMI, and terms depend on your lender and location. Verify final numbers with your lender.