How to use this calculator
Enter the home price and your down payment (in dollars or as a percentage), choose a loan term, and set the interest rate. Add your annual property tax, homeowners insurance, and optional HOA fees for a complete monthly payment estimate.
The calculator automatically adds PMI if your down payment is below 20%. Expand the amortization table to see how your balance, principal, and interest change year by year over the life of the loan.
Understanding your mortgage payment
| Component | What it covers | Typical range |
|---|---|---|
| Principal | Reduces your loan balance | Varies by loan size |
| Interest | Cost of borrowing money | 6-7% (2024-2025 avg) |
| Property Tax | Local government tax on property | 0.5-2.5% of home value/yr |
| Homeowners Insurance | Covers damage, liability | $1,200-$3,000/yr |
| PMI | Required if < 20% down | 0.5-1% of loan/yr |
| HOA | Community maintenance fees | $0-$500+/mo |
Frequently asked questions
How is a monthly mortgage payment calculated?
The principal and interest portion 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, and n is the total number of payments. Your full payment also includes property taxes, insurance, and potentially PMI and HOA fees.
What is PMI and when is it required?
Private Mortgage Insurance (PMI) is required when your down payment is less than 20% of the purchase price. It typically costs 0.5-1% of the loan amount per year. You can request removal at 20% equity, and lenders must cancel it automatically at 22% equity.
What is PITI in a mortgage payment?
PITI stands for Principal, Interest, Taxes, and Insurance. These are the four core components of your monthly mortgage payment. Many lenders collect all four into an escrow account and make the tax and insurance payments on your behalf.
Is a 15-year or 30-year mortgage better?
A 15-year mortgage has higher monthly payments but saves significantly on total interest and usually carries a lower rate. A 30-year mortgage provides lower monthly payments and more flexibility. The right choice depends on your budget, financial goals, and how long you plan to stay in the home.
How much house can I afford?
A common guideline is the 28/36 rule: keep your monthly housing costs below 28% of gross monthly income, and total debt payments below 36%. For a household earning $8,000 per month, that means a maximum housing payment of about $2,240.