Mortgage Calculator

Use our free mortgage calculator to estimate your monthly mortgage payment, including principal, interest, taxes, insurance, and PMI. See how extra payments can reduce your loan term and save you thousands in interest. Adjust the inputs to see how different scenarios affect your mortgage costs.

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How the Mortgage Payment Calculator Works

This tool helps you estimate your monthly mortgage payment including principal, interest, property taxes, and insurance (PITI) based on your loan details.

  1. Enter Your Loan Details: Input your home price, down payment (or percentage), loan term, and interest rate. The loan amount is calculated as home price minus down payment.
  2. Add Property Taxes and Insurance: Include your estimated annual property taxes and homeowners insurance costs to calculate your complete monthly payment (PITI).
  3. Include HOA Fees and PMI if Applicable: Add any monthly Homeowners Association (HOA) fees. Private Mortgage Insurance (PMI) is automatically considered if your down payment is less than 20%.
  4. Consider Extra Payments: Use the "Extra Monthly Payment" field to see how additional payments can shorten your loan term and reduce total interest paid.
  5. Calculate Your Payment: Click the "Calculate" button to see your total estimated monthly payment, a breakdown of its components, and an amortization schedule.

The Mortgage Payment Formula

The core calculation for the principal and interest portion of your payment uses the following standard formula:

M = P [ r(1+r)^n / ((1+r)^n - 1) ] Where: M = Monthly principal and interest payment P = Principal loan amount (home price - down payment) r = Monthly interest rate (annual rate / 12) n = Total number of payments (loan term in years × 12)

To get the total estimated monthly payment (PITI + HOA), we add the monthly property tax (annual tax / 12), monthly homeowners insurance (annual insurance / 12), monthly PMI (if applicable), and monthly HOA fees to the calculated principal and interest payment (M).

Understanding Your Mortgage Payment (PITI)

Your monthly mortgage payment typically consists of four main components, often referred to as PITI:

  • Principal: This is the portion of your payment that goes towards paying down the actual amount you borrowed. In the early years, less of your payment goes to principal, but this amount increases over the life of the loan.
  • Interest: This is the cost charged by the lender for borrowing the money. A larger portion of your payment goes towards interest in the early years, decreasing as your loan balance reduces.
  • Taxes: Property taxes are assessed by local government based on your home's value. Your lender often collects 1/12th of your estimated annual property taxes each month and holds it in an escrow account, paying the bill on your behalf when it's due.
  • Insurance: This includes Homeowners Insurance (protecting against damage, theft, etc.) and potentially Private Mortgage Insurance (PMI). Like taxes, homeowners insurance premiums are often collected monthly via escrow. PMI is typically required if your down payment is less than 20% and protects the lender if you default.

Some payments may also include Homeowners Association (HOA) fees if you live in a community with an HOA.

Factors That Affect Your Mortgage Payment

Several factors influence the size of your monthly mortgage payment:

  • Loan Amount: The larger the amount borrowed (home price minus down payment), the higher the payment.
  • Interest Rate: A higher interest rate means a higher borrowing cost and thus a higher monthly payment.
  • Loan Term: Shorter loan terms (e.g., 15 years) have higher monthly payments but lower total interest costs compared to longer terms (e.g., 30 years).
  • Down Payment: A larger down payment reduces the loan amount, lowering the monthly payment and potentially avoiding PMI.
  • Property Taxes and Insurance: These costs vary by location and home value and are included in the escrow portion of your payment.
  • PMI: If required, PMI adds to your monthly cost until sufficient equity is built.
  • HOA Fees: If applicable, these are added to your total monthly housing expense.

Benefits of Extra Payments

Making additional payments towards your mortgage principal, even small amounts, can yield significant benefits:

  • Pay Off Loan Faster: Extra payments shorten the loan term, allowing you to become mortgage-free sooner.
  • Save on Interest: By reducing the principal balance faster, you pay less interest over the life of the loan.
  • Build Equity Quicker: Increased principal payments accelerate the growth of your home equity.

Use the "Extra Monthly Payment" field in the calculator to explore how different extra payment amounts impact your loan payoff timeline and total interest savings.

Frequently Asked Questions

A typical mortgage payment includes four components: Principal (the amount borrowed), Interest (the cost of borrowing), Taxes (property taxes), and Insurance (homeowners insurance and potentially PMI). This is often abbreviated as PITI. Some payments may also include HOA fees.

This calculator provides a good estimate of your monthly mortgage payment based on the information you provide. However, actual payments can vary slightly due to factors like fluctuating insurance premiums, changes in property taxes, or specific lender fees. It's best used for planning and comparison purposes.

Private Mortgage Insurance (PMI) is insurance that protects the lender if you default on your loan. It's typically required for conventional loans when your down payment is less than 20% of the home's purchase price. PMI usually costs between 0.5% and 1% (or sometimes more) of the original loan amount annually and is added to your monthly mortgage payment. Once your loan balance drops to 80% of the original home value (or sometimes 78% automatically), you can typically request to have PMI removed, or it may be automatically terminated.

There are several ways to potentially lower your monthly mortgage payment:

  • Make a larger down payment to reduce the initial loan amount.
  • Choose a longer loan term (e.g., 30 years instead of 15), although this increases the total interest paid over time.
  • Shop around for a loan with a lower interest rate (improving your credit score can help).
  • Appeal your property tax assessment if you believe it's too high.
  • Shop around for cheaper homeowners insurance policies that still provide adequate coverage.
  • Refinance your mortgage to a lower interest rate if market rates have dropped significantly since you obtained your loan.
  • Once you reach 20% equity, ensure PMI is removed if applicable.

Making extra payments directly toward your mortgage principal helps you build equity faster, pay off your loan sooner, and save a significant amount on total interest costs. Ensure your extra payments are specifically designated for the principal balance. Even small additional amounts can make a big difference over the life of the loan. Use the "Extra Monthly Payment" field in our calculator to see the potential impact.