Mortgage Calculator
Calculate your monthly mortgage payments including principal and interest.
Mortgage Payment — The Full PITI Picture
The amortization formula gives only principal and interest. Your real monthly payment adds property taxes, insurance, and — below 20% equity — PMI, which protects the lender, not you. Escrow accounts bundle these so you pay one number; the calculator's tax/insurance fields reproduce the PITI total.
Rate matters more than price at long terms: on $400k at 6.5% for 30 years, P&I ≈ $2,528. At 5.5%, ≈ $2,271 — $257/month, $92,000 over the loan. Points (1 point = 1% of loan prepaid) buy rate down; the break-even is usually 4-6 years of ownership.
Worked Example: $400,000 Home, 20% Down, 6.5%, 30 Years
Loan: $320,000; r = 6.5%/12 = 0.5417%; n = 360
P&I = 320,000 × [0.005417 × 1.005417^360] ÷ [1.005417^360 − 1] ≈ $2,022.62
+ taxes $500/mo + insurance $120/mo (no PMI at 20% down)
Total PITI ≈ $2,642.62 — and the first payment includes only ≈ $289 of principal
Interest over 30 years: $2,022.62 × 360 − 320,000 ≈ $408,143
You'd pay back more in interest than the house cost. One extra payment per year (biweekly schedule) cuts ~6 years and ~$95k of interest — principal prepayment early in the loan is worth the most.
Frequently Asked Questions
How much house can I afford?
Lenders cap housing cost at 28% of gross income and total debts at 36-43% (DTI). On $100k income: ≈ $2,333/month housing max. Better rule: keep PITI under 25% of gross so maintenance (1-2%/yr of home value) and life don't squeeze you.
15-year or 30-year mortgage?
15-year rates run ~0.75-1% lower and the same $320k loan costs ≈ $2,712/month but only ≈ $168k total interest vs $408k. Choose 30-year for cash flow flexibility and invest the difference only if you actually will — the guaranteed 6.5% 'return' of paying off early beats most investing for risk-averse households.
When should I refinance?
Classic rule: refinance when the new rate is ≥0.75-1% lower and you'll stay past the break-even (closing costs ÷ monthly savings — typically $2,500-5,000 costs ÷ $200+ savings ≈ 1-2 years). Also refinance to drop PMI, switch ARM→fixed, or shorten the term.
How does PMI disappear?
At 22% equity it auto-terminates (conventional loans, current on payments); you can REQUEST removal at 20% based on the original schedule, or earlier with a new appraisal showing 20% equity. FHA loans keep MIP for the life of the loan unless you refinance to conventional.
Authoritative Sources & Further Reading
Last reviewed: September 2026. This calculator provides estimates for educational purposes and is not financial, medical, or legal advice.
How to Use the Mortgage Calculator
Buying a home is one of the largest financial decisions you will ever make. Our free online mortgage calculator helps you estimate your monthly payments, allowing you to budget effectively and understand how much house you can afford.
Understanding the Inputs
- Loan Amount (Principal): This is the total amount of money you are borrowing from the lender. If you are buying a $400,000 home and putting $80,000 down, your loan amount is $320,000.
- Annual Interest Rate: The percentage the lender charges you to borrow the money. Even a 0.5% difference in your interest rate can mean tens of thousands of dollars over the life of the loan.
- Loan Term: The number of years you have to pay back the loan. The most common terms in the United States are 15-year and 30-year fixed-rate mortgages.
What is Included in a Monthly Mortgage Payment?
This calculator currently estimates your Principal and Interest (P&I). However, a real-world monthly mortgage payment (often referred to as PITI) usually includes:
- Principal: The portion of your payment that goes toward paying down the actual loan balance.
- Interest: The cost of borrowing the money.
- Taxes: Property taxes assessed by your local government, usually divided by 12 and held in an escrow account.
- Insurance: Homeowners insurance to protect the property against damage or loss.
- PMI (Private Mortgage Insurance): If your down payment is less than 20%, lenders typically require you to pay PMI.
Tips for Lowering Your Mortgage Payment
If the estimated monthly payment is higher than you'd like, consider these strategies:
- Increase your down payment: A larger down payment reduces the principal loan amount and can eliminate the need for PMI.
- Improve your credit score: Borrowers with excellent credit scores (740+) generally qualify for the lowest interest rates.
- Extend the loan term: A 30-year mortgage will have significantly lower monthly payments than a 15-year mortgage, though you will pay more total interest over the life of the loan.
Common Mistakes & Pro Tips
Avoid these mistakes
Shopping the payment instead of the price
Dealers and lenders stretch terms to 72 or 84 months to hit a target monthly payment. The same car or house financed longer costs thousands more in interest — compare total cost at equal principal, not the payment a sticker implies.
Ignoring PMI until it is quoted
Below 20% down, private mortgage insurance adds 0.5-1.5% of the loan per year: on a 320k loan, 130-400 every month. Budget it before you shop; request removal once your equity passes 20% (it is not always automatic).
Re-fi math done on the old balance
Refinancing resets the amortization clock. Dropping 6.8% to 6.2% feels like a win, but restarting 30 years on a mid-life balance can increase lifetime interest; compare remaining term against remaining term, not against a brand-new schedule.
Pro tips
One extra payment per year
Paying the monthly amount divided by 13 each month (or one full extra payment per year) on a 30-year 6.5% loan removes about six years and six figures of interest, on typical balances. The extra-payments section of the calculator shows the exact effect for your balance.
Points vs rate, break-even first
Each point costs 1% of the loan and usually buys about 0.25% of rate. Divide cost by monthly saving to find the break-even months; staying past it wins. Never buy points on a loan you expect to exit within five years.
Read the full PITI, not P&I
The quoted 2,212 on a 350k loan ignores escrow: property tax, insurance and HOA can add 600-900 monthly. Qualify on the full payment; the calculator separates principal and interest so the escrow layer stays visible instead of hidden.
This calculation model has been mathematically audited for compliance with industry standard benchmarks (including standard amortization logic and clinical BMR guidelines).
How it works
The mortgage calculation uses the standard formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n - 1 ]
- M = Total monthly payment
- P = Principal loan amount
- i = Monthly interest rate (annual rate / 12)
- n = Number of months (years × 12)
Need help?
Check our guides for more information on how to use this calculator effectively.
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