Buying a home is the largest financial decision most people ever make, and the number that drives it is the monthly payment. This mortgage calculator estimates your full monthly housing cost — principal, interest, property tax, home insurance, private mortgage insurance (PMI), and HOA dues — so you are not blindsided by a bill that is larger than the loan payment alone suggests.
Adjust the sliders and every figure updates instantly. You can also add an extra monthly amount to see how much faster you would own the home outright and how many years of interest you would cut off.
How to Use
- Enter the Home Price — the amount you agree to pay the seller.
- Set your Down Payment as a percentage of that price. Putting 20% or more is the classic threshold: below it, lenders almost always require PMI.
- Type your Interest Rate (APR). If you have not locked a rate yet, check the national average for your credit profile and test a range of ±0.5% to stress-test your budget.
- Choose the Loan Term — 30 years is the default, but 15-year loans usually carry a lower rate and build equity far faster.
- Expand the advanced options to add Property Tax, Home Insurance, PMI, and HOA Fee. These are optional, but if you leave them out your "monthly payment" will understate what you actually owe.
- Use the Extra Monthly Payment slider to model prepayment. Even a small recurring amount can remove years from the loan.
The result card breaks the payment into P&I, tax, insurance, PMI and HOA, then shows the total monthly outlay (often called PITI), the total interest paid over the life of the loan, and an interactive amortization schedule.
The Mortgage Payment Formula
Your monthly principal-and-interest payment comes from the standard amortization formula used by Fannie Mae, Freddie Mac, and every major US lender:
M = P × r(1 + r)ⁿ / ((1 + r)ⁿ − 1)
Where:
- M is the monthly payment.
- P is the loan amount (home price minus down payment).
- r is the monthly interest rate — the annual APR divided by 12.
- n is the total number of monthly payments — the loan term in years times 12.
Worked example on a $400,000 home with 20% down at 6.803% for 30 years: the loan amount is $320,000, the monthly rate is 0.005669, and n = 360. Plugging in gives a monthly P&I of $2,086.80, and over 30 years the total interest paid is about $431,248. Notice that the interest alone is larger than the original loan — which is why even a small rate change or a little extra principal makes such a big difference.
If the rate is 0%, the formula divides by zero, so the engine simply splits the principal evenly across the number of months: $160,000 over 360 months is $444.44 per month.
What Goes Into Your Monthly Payment (PITI)
The loan payment is only the beginning. Lenders prefer your total housing cost — PITI — to stay under roughly 28% of your gross monthly income:
- Principal & Interest — repaying the loan balance plus the lender's charge.
- Property Tax — set by your county, usually 0.5%–2.5% of the home value per year, billed through escrow.
- Home Insurance — required by every lender; typically $1,000–$3,000 per year depending on location.
- PMI — private mortgage insurance when your down payment is under 20%, usually 0.3%–1.9% of the loan amount annually. Federal law requires lenders to cancel PMI automatically once you reach 78% loan-to-value.
- HOA — dues for condos and planned communities, often $100–$500 per month, on top of the mortgage.
A payment of $2,087 for P&I can easily become $2,900 once tax, insurance, and HOA are added. Budget for the total, not just the loan.
30-Year vs 15-Year: Which Is Better?
Compare two loans on the same $250,000 home at 20% down:
- 30-year at 6.8%: P&I around $1,650/month, but roughly $260,000 of total interest.
- 15-year at 6.0%: P&I about $1,688/month, but total interest only around $104,000.
The 15-year payment is only slightly higher while saving well over $150,000 — yet it locks you into that higher payment for 15 years. Choose the 15-year if your cash flow is comfortable and you like forced savings. Choose the 30-year if you value flexibility or expect to invest the monthly difference at a return above your mortgage rate. You can always prepay a 30-year loan as if it were a 15-year one, but you cannot stretch a 15-year loan back out.
Examples
Example 1 — A first-time buyer. A couple offers $400,000 on a home, puts down 5% ($20,000), locks 6.5% for 30 years, and adds 1.2% property tax, $1,500 insurance, and $70 PMI. The loan is $380,000; P&I is about $2,405; tax and insurance add roughly $543; PMI adds $220. Total PITI is near $3,170 per month. Because they put down less than 20%, the calculator flags the PMI line until their equity reaches 20%.
Example 2 — The prepayment effect. On the same $320,000 loan at 6.8% for 30 years, adding just $100 per month to principal shaves roughly four to six years off the term and saves $40,000–$60,000 in interest. Slide the Extra Monthly Payment control upward to see your own payoff date move earlier.
Example 3 — Upsizing stress test. On a $1,000,000 home with 20% down at 6.5%, the P&I alone is about $5,057 per month — before tax and insurance. Running this number before you shop prevents you from falling in love with a home your budget cannot actually carry.
FAQ
How is a mortgage monthly payment calculated?
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 divided by 12), and n is the number of monthly payments (years times 12). This is the same formula used by Fannie Mae, Freddie Mac, and major US lenders.
Is a 30-year or 15-year mortgage better?
A 15-year loan usually has a lower rate and saves tens of thousands of dollars in interest, but the monthly payment is 30–50% higher. Choose a 15-year loan if your cash flow is comfortable and you prefer forced savings; choose a 30-year loan if you want flexibility or plan to invest the difference at a return above your mortgage rate.
How much down payment do I need?
Conventional loans accept as little as 3–5% down, but you will pay private mortgage insurance (PMI) until you reach 20% equity. Putting 20% down removes PMI, qualifies you for a better rate, and signals lower risk to lenders. The 20% threshold remains the most common rule of thumb.
What is PMI and when does it go away?
Private Mortgage Insurance protects the lender if you default, and typically costs 0.3–1.9% of the loan amount each year. Under US law, lenders must automatically cancel PMI when your loan-to-value ratio reaches 78% of the original home value, and you can request cancellation at 80%.
Is paying extra toward principal worth it?
Yes. Even an extra $100 per month on a $320,000, 30-year loan at 6.8% can cut 4–6 years off the term and save $40,000–$60,000 in interest. Use the Extra Monthly Payment slider on this page to see your exact savings, but check your loan for any prepayment penalty first.
Are property taxes and insurance included in the mortgage?
They are not part of the loan itself, but most lenders collect them monthly through an escrow account and pay the tax authority and insurer on your behalf. That is why your "monthly payment" on a lender statement is usually higher than the P&I figure alone.
Disclaimer
This mortgage calculator is provided for informational purposes only and does not constitute financial, lending, or tax advice. Estimates are based on the inputs you enter and the standard amortization formula; actual offers vary by lender, credit profile, location, and program. Property tax, insurance, and PMI figures are approximations. Always confirm your final payment and terms directly with a licensed mortgage professional before committing to a loan.