Mortgage Payment Calculator
Calculate your monthly mortgage payments with our free mortgage payment calculator. This tool helps you estimate your monthly payment including principal, interest, property taxes, and insurance (PITI) based on your loan details.
Monthly Payment
This is your estimated monthly mortgage payment based on the information you provided. This payment includes principal, interest, property taxes, and insurance.
How the Mortgage Payment Calculator Works
Enter Your Loan Details
Input your loan amount, interest rate, and loan term. The loan amount is the total amount you're borrowing (home price minus down payment).
Add Property Taxes and Insurance
Include your annual property taxes and homeowners insurance costs to calculate your complete monthly payment (PITI).
Include PMI if Applicable
If your down payment is less than 20%, private mortgage insurance (PMI) will be included in your monthly payment.
Calculate Your Payment
Click the calculate button to see your total monthly payment and a breakdown of its components.
The Mortgage Payment Formula
Where:
M = Monthly payment
P = Principal (loan amount)
r = Monthly interest rate (annual rate divided by 12)
n = Total number of payments (loan term in years × 12)
This formula calculates the monthly principal and interest payment. To get the total monthly payment, we add the monthly property tax, homeowners insurance, and PMI (if applicable).
Understanding Your Mortgage Payment
Your monthly mortgage payment typically consists of four components, often referred to as PITI:
Principal
This is the amount you borrowed from the lender. Each month, a portion of your payment goes toward reducing this principal balance. In the early years of your mortgage, only a small percentage of your payment goes toward principal. As time goes on, more of your payment is applied to the principal.
Interest
This is the cost of borrowing money from the lender. Interest is calculated as a percentage of your remaining loan balance. In the early years of your mortgage, a larger portion of your payment goes toward interest. As your principal balance decreases, so does the amount of interest you pay each month.
Taxes
Property taxes are assessed by your local government and are typically paid through your mortgage servicer. The servicer collects a portion of your annual property tax bill each month and holds it in an escrow account until the taxes are due.
Insurance
This includes homeowners insurance, which protects your property against damage, and possibly private mortgage insurance (PMI), which is required if your down payment is less than 20% of the home's value. Like property taxes, insurance premiums are often collected monthly and held in escrow.
Factors That Affect Your Mortgage Payment
- Loan Amount: The more you borrow, the higher your monthly payment will be.
- Interest Rate: Higher interest rates result in higher monthly payments.
- Loan Term: Shorter loan terms (e.g., 15 years vs. 30 years) result in higher monthly payments but lower total interest paid over the life of the loan.
- Down Payment: A larger down payment reduces your loan amount and may eliminate the need for PMI.
- Property Taxes: These vary by location and are based on the assessed value of your property.
- Homeowners Insurance: The cost depends on factors such as your home's value, location, and coverage level.
Frequently Asked Questions
What is included in a mortgage payment?
A typical mortgage payment includes four components: Principal (the amount borrowed), Interest (the cost of borrowing), Taxes (property taxes), and Insurance (homeowners insurance and possibly PMI). These four components are often referred to as PITI. Some mortgage payments may also include homeowners association (HOA) fees if applicable.
How accurate is this mortgage calculator?
This calculator provides a good estimate of your monthly mortgage payment based on the information you provide. However, actual payments may vary slightly due to factors such as the exact day of the month your payment is due, rounding differences, or changes in property tax assessments. For the most accurate payment information, consult with your mortgage lender.
What is PMI and when is it required?
Private Mortgage Insurance (PMI) is insurance that protects the lender if you default on your loan. It's typically required when your down payment is less than 20% of the home's purchase price. PMI usually costs between 0.5% and 1% of the entire loan amount annually and is added to your monthly mortgage payment. Once you reach 20% equity in your home, you can request to have PMI removed.
How can I lower my monthly mortgage payment?
There are several ways to lower your monthly mortgage payment: make a larger down payment to reduce the loan amount, extend the loan term (though this increases total interest paid), find a loan with a lower interest rate, reduce property taxes by appealing your assessment if it's too high, shop around for cheaper homeowners insurance, or refinance your mortgage if interest rates have dropped since you obtained your loan.
What happens if I make extra payments toward my mortgage?
Making extra payments toward your mortgage principal can help you pay off your loan faster and save on interest costs. Even small additional amounts can make a significant difference over time. For example, paying an extra $100 per month on a 30-year, $300,000 mortgage with a 4% interest rate could help you pay off your loan about 4 years earlier and save around $30,000 in interest. Use our Extra Payment Calculator to see the impact of additional payments on your specific loan.