How to use this mortgage calculator
- Home price — the purchase price of the property.
- Down payment — the share of the price you pay up front. Everything else is borrowed.
- Interest rate — the annual rate your lender quotes. Use the rate from a loan estimate if you have one.
- Loan term — how long you will take to repay. 30 and 15 years are the most common in the U.S.
- Property tax, insurance, HOA and PMI — the costs that are usually added to your monthly payment through an escrow account.
The result updates as you type. The big number is your full monthly housing payment; the colored bar shows how much of it goes to the loan itself versus taxes, insurance and PMI.
What makes up a mortgage payment (PITI)
Lenders describe a typical payment as PITI: Principal, Interest, Taxes and Insurance.
- Principal pays down the amount you borrowed.
- Interest is what the lender charges for the loan. Early in the loan most of each payment is interest; near the end it is mostly principal.
- Property tax is set by your local government, usually as a percentage of the assessed value.
- Homeowners insurance protects the property and is required by lenders.
Two more costs often appear: PMI (private mortgage insurance) on conventional loans with less than 20% down, and HOA dues if the home is in a homeowners association.
The mortgage payment formula
The principal-and-interest part of the payment uses the standard amortization formula:
M = P × r × (1 + r)n ÷ ((1 + r)n − 1)
where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12) and n is the number of monthly payments (years × 12).
Example: a $400,000 home with 20% down leaves a $320,000 loan. At 6.5% for 30 years, r = 0.065 ÷ 12 ≈ 0.005417 and n = 360, so the principal and interest payment is $2,022.62 per month. Over 30 years you would pay about $408,142 in interest — more than the price of a second home in many areas.
15-year vs 30-year mortgage
A shorter term raises the monthly payment but slashes total interest. For the same $320,000 loan at 6.5%:
| Term | Monthly P&I | Total interest |
|---|---|---|
| 30 years | $2,022.62 | $408,142 |
| 20 years | $2,385.83 | $252,600 |
| 15 years | $2,787.54 | $181,758 |
In practice 15-year loans also come with lower rates than 30-year loans, which widens the gap further.
How to lower your monthly payment
- Put at least 20% down to avoid PMI and borrow less.
- Improve your credit score before applying — the best rates go to scores of 740 and above.
- Shop several lenders. Even a 0.25% lower rate saves thousands over the life of a loan.
- Consider points. Paying discount points up front lowers the rate if you plan to keep the loan for many years.
- Appeal your property tax assessment if it looks high compared with similar homes.
When does PMI go away?
On a conventional loan you can ask your lender to cancel PMI once your balance reaches 80% of the home's original value, and it ends automatically at 78%. Use the amortization schedule above to see roughly which year that happens. FHA loans charge a mortgage insurance premium instead, which follows different rules.
Frequently asked questions
How much house can I afford?
A common guideline is to keep your total housing payment under about 28% of gross monthly income and all debt payments under 36%. Our home affordability calculator works this out from your income and debts.
Does this calculator include property taxes and insurance?
Yes. Property tax, homeowners insurance, PMI and HOA fees are added to principal and interest to give your full estimated monthly payment.
Why is most of my early payment interest?
Interest is charged on the remaining balance. At the start the balance is largest, so the interest portion is largest. As you pay down principal, the interest portion shrinks and more of each payment reduces the loan.
Is the interest rate the same as the APR?
Not quite. The interest rate determines your payment; the APR also includes lender fees and points, so it is usually a little higher. Use the interest rate here for the most accurate payment.
How accurate is this estimate?
Principal and interest are exact for a fixed-rate loan. Taxes, insurance and PMI are estimates — your lender’s Loan Estimate will show the precise figures for your property.
Last updated: October 8, 2026