How is a monthly mortgage payment calculated?

A mortgage payment consists of principal and interest (P&I) plus property taxes, homeowners insurance, and PMI if applicable (together called PITI). The P&I portion is calculated using the loan amount, interest rate, and term using the standard amortization formula. On a $350K home with 20% down at 6.75%, the P&I is about $1,816/month, plus approximately $500/month for taxes and insurance.

How much house can I afford?

Most lenders use the 28/36 rule: your mortgage payment should not exceed 28% of gross monthly income, and total debt payments should stay under 36%. At $100K income, that's a max mortgage payment of $2,333/month, which supports roughly a $350K-$400K home depending on your rate, taxes, and insurance.

What is PMI and how do I avoid it?

Private Mortgage Insurance (PMI) is required when your down payment is less than 20%. It costs 0.3-1.5% of the loan amount annually ($75-$375/month on a $300K loan). Avoid it by putting 20% down, using a piggyback loan (80/10/10), or choosing a lender-paid PMI option with a slightly higher rate. PMI automatically drops at 78% LTV.

How much difference does the interest rate make?

On a $300K, 30-year loan: at 6.0% you pay $1,799/month and $347K total interest. At 7.0% you pay $1,996/month and $418K total interest. That 1% difference costs $197/month more and $71,000 more over the life of the loan. Even a 0.25% difference adds up to nearly $15,000 over 30 years.

Should I choose a 15-year or 30-year mortgage?

A 30-year mortgage has lower monthly payments but costs far more in total interest. A 15-year mortgage has higher payments but saves over $100,000 in interest on a typical loan and comes with a lower rate (usually 0.5-0.75% less). Choose 30-year for affordability and flexibility, or 15-year if you can handle the higher payment and want to build equity faster.

What are the hidden costs of owning a home?

Beyond the mortgage payment, expect: property taxes (1-2% of home value/year), homeowners insurance ($1,200-$3,000/year), maintenance (1-2% of home value/year), utilities ($200-$400/month), and HOA fees if applicable ($200-$500/month). The true cost of homeownership is typically 30-50% more than just the mortgage payment.

Home / Mortgage Calculator

Mortgage Calculator

Calculate your monthly mortgage payment with taxes, insurance, and PMI — plus a full amortization schedule

Quick Overview

Who Should Use This

First-time homebuyers, current homeowners comparing loan scenarios, and anyone shopping for a mortgage who wants to know their true monthly cost.

Purpose

Calculate your complete monthly mortgage payment — principal, interest, taxes, insurance, and PMI — and generate a full amortization schedule to understand long-term loan costs.

Example

$400K home, 20% down, 6.75% rate, 30-year term → $2,076/mo P&I + $417 taxes + $150 insurance = ~$2,643/month total, with $427K paid in interest over the life of the loan.

Loan Details

Pro Tip: Your total monthly housing cost (PITI + HOA) should stay under 28% of your gross monthly income. Use this calculator to find a home price that fits your budget comfortably.

Your Monthly Payment

Total Monthly Payment

Principal, interest, taxes, insurance & PMI

per month

P&I Tax Insurance PMI HOA

Monthly Breakdown

Principal & Interest$0

Property Tax$0

Home Insurance$0

PMI$0

HOA$0

Total Monthly$0

Loan Summary

Home Price$0

Down Payment$0

Loan Amount$0

Total Interest Paid$0

Total of All Payments$0

Payoff Date—

Amortization Schedule

How to Use

How to Use This Calculator

Calculate your complete mortgage payment in 4 easy steps

Enter Home Price

Input the purchase price of the home you're considering. Adjust the down payment amount or percentage — 20% avoids PMI.

Set Loan Terms

Choose your loan term (15 or 30 years most common) and enter the interest rate from your lender's quote or pre-approval letter.

Add Taxes & Insurance

Enter your annual property tax and homeowners insurance. Add HOA fees if applicable. These are part of your true monthly cost.

Review Results

See your total monthly payment, payment breakdown chart, total interest over the loan, and a full amortization schedule.

What Is a Mortgage Calculator?

A mortgage calculator estimates your monthly home loan payment based on the home price, down payment, interest rate, and loan term. It goes beyond the basic principal and interest to include property taxes, homeowners insurance, PMI, and HOA fees — giving you the true total cost of homeownership each month.

This calculator also generates a complete amortization schedule showing how each payment is split between principal and interest over the life of the loan, helping you understand when you'll build significant equity and how much total interest you'll pay.

Understanding Your Mortgage Payment

Principal: The portion of your payment that reduces the loan balance. Starts small and grows over time as interest decreases.
Interest: The cost of borrowing money. Largest in early years when the balance is high. On a $320K loan at 6.75%, first month's interest is $1,800.
Property taxes: Typically 1-2% of home value annually. Paid monthly into an escrow account managed by your lender.
Homeowners insurance: Protects against damage and liability. Usually $100-250/month depending on location, home value, and coverage.
PMI: Required if your down payment is less than 20%. Costs 0.3-1.5% of the loan annually. Drops automatically at 78% LTV.

Mortgage Essentials

What Every Buyer Should Know

Key concepts for understanding your mortgage

🏠

The 28/36 Rule

Housing costs should stay under 28% of gross income. Total debt under 36%. At $100K income: max housing $2,333/month, max total debt $3,000/month including car, student loans, etc.

💰

Down Payment Impact

20% down avoids PMI and gets the best rates. 10% down is a good middle ground. 3-5% down is possible but adds PMI ($100-300/month) and higher rates. Every 5% extra down saves thousands.

📊

Interest Adds Up Fast

On a $320K loan at 6.75% for 30 years, you'll pay $427K in interest — more than the original loan! Choosing 15 years instead saves $250K+ in interest but raises monthly payments by ~$750.

🛡️

Escrow Accounts

Most lenders collect property taxes and insurance monthly and pay them for you through an escrow account. Your statement shows the total PITI, not just P&I. Escrow amounts adjust annually.

📈

Rate Shopping Saves Thousands

Getting quotes from 3-5 lenders can save 0.25-0.5% on your rate. On a $300K loan, 0.25% saves $50/month and $18,000 over 30 years. All credit inquiries within 14-45 days count as one.

⚡

Extra Payments Power

Just $100/month extra on a $320K loan at 6.75% saves $59,000 in interest and pays off 3.8 years early. Round up payments or make biweekly payments for easy savings.

Common Questions

Mortgage FAQ

Your total monthly payment has several components:

1. Principal & Interest (P&I):

Calculated using the amortization formula based on loan amount, rate, and term
$320K loan at 6.75% for 30 years = $2,076/month P&I
This amount stays fixed for the life of a fixed-rate loan

2. Property Taxes:

Annual tax bill divided by 12
$5,000/year = $417/month
Typically 1-2% of home value depending on location
Can increase annually as home values rise

3. Homeowners Insurance:

Annual premium divided by 12
$1,800/year = $150/month
Covers damage, theft, liability
Flood insurance is separate ($500-3,000/year extra if in flood zone)

4. PMI (if less than 20% down):

0.3-1.5% of loan amount per year
$320K loan at 0.5% = $133/month
Drops at 78% LTV or by request at 80%

Total example: $2,076 + $417 + $150 + $133 = $2,776/month

Use these rules of thumb based on your gross annual income:

Conservative (2.5x income):

$75K income → $187K home
$100K income → $250K home
$150K income → $375K home

Standard (3-3.5x income):

$75K income → $225K-$263K home
$100K income → $300K-$350K home
$150K income → $450K-$525K home

Stretched (4-4.5x income) — not recommended:

$75K income → $300K-$338K home
$100K income → $400K-$450K home
$150K income → $600K-$675K home

Factors that affect affordability:

Down payment size (more down = more buying power)
Interest rate (every 1% = ~$100/month per $100K borrowed)
Other debts (car loans, student loans reduce what you qualify for)
Property taxes (vary dramatically by location)
Credit score (affects your rate, which affects your payment)

Private Mortgage Insurance protects the lender (not you) if you default:

When PMI is required:

Conventional loans with less than 20% down payment
Costs 0.3-1.5% of the loan amount per year
On a $320K loan: $80-400/month depending on credit and LTV

How to remove PMI:

Automatic removal: Lender must cancel at 78% LTV (based on original value)
Request removal: You can request at 80% LTV with good payment history
New appraisal: If home has appreciated, get a new appraisal to prove 20% equity
Refinance: If your equity exceeds 20%, refinancing eliminates PMI

How to avoid PMI entirely:

Put 20% down
Piggyback loan: 80% first mortgage + 10% second mortgage + 10% down
Lender-paid PMI: Higher rate but no separate PMI payment
VA loan: Never has PMI regardless of down payment

Even small rate differences have a massive long-term impact:

$320,000 loan, 30-year fixed:

At 5.75%:

Payment: $1,867/month
Total interest: $352,120

At 6.25%:

Payment: $1,970/month (+$103)
Total interest: $389,200 (+$37,080)

At 6.75%:

Payment: $2,076/month (+$209)
Total interest: $427,360 (+$75,240)

At 7.25%:

Payment: $2,183/month (+$316)
Total interest: $465,880 (+$113,760)

Key takeaway: Each 0.5% increase adds about $100/month and $35,000-40,000 in total interest over 30 years on a $320K loan. This is why rate shopping and credit improvement before applying can save you tens of thousands of dollars.

Here's the complete comparison on a $320,000 loan:

30-year at 6.75%:

Monthly P&I: $2,076
Total interest: $427,000
Total paid: $747,000
Equity at year 5: $19,600

15-year at 6.00%:

Monthly P&I: $2,700
Total interest: $166,000
Total paid: $486,000
Equity at year 5: $94,500

The difference:

$624 more per month with 15-year
$261,000 less total interest
Own your home free and clear in half the time

The smart compromise:

Get a 30-year for the lower required payment
Make payments as if it were a 15-year when you can
If money gets tight, drop back to the lower 30-year payment
You get flexibility AND accelerated payoff

The mortgage is just the beginning — budget for these ongoing costs:

Annual costs beyond the mortgage:

Maintenance & repairs: 1-2% of home value/year ($4,000-8,000 on a $400K home)
Utilities: $200-400/month (electric, gas, water, sewer, trash, internet)
Lawn care & landscaping: $100-300/month if outsourced
HOA fees: $200-500/month if applicable

Periodic big-ticket expenses:

Roof replacement: $10,000-25,000 every 20-25 years
HVAC system: $5,000-12,000 every 15-20 years
Water heater: $1,500-3,000 every 10-15 years
Appliance replacements: $500-3,000 each
Exterior painting: $3,000-7,000 every 7-10 years

True monthly cost of a $400K home:

Mortgage (P&I): $2,076
Property tax: $417
Insurance: $150
Maintenance reserve: $333
Utilities: $300
Total: ~$3,276/month (58% more than just P&I)

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