Mortgage Payment Calculator

How to Use This Mortgage Calculator

Enter your home price, down payment, loan term, and interest rate to see your estimated monthly payment. The calculator automatically adds property tax, homeowners insurance, HOA fees, and PMI (if your down payment is under 20%) to give you a realistic total.

What Is PITI?

PITI stands for Principal, Interest, Taxes, and Insurance — the four components that make up a typical monthly mortgage payment. Principal is the portion of your payment that reduces your loan balance. Interest is the lender's fee for the loan, calculated using the standard amortization formula and fixed for the life of a fixed-rate loan. Taxes are your annual property tax bill, typically 0.5%–2% of your home's value depending on state and county, collected in monthly installments and held in escrow until your county bill is due. Insurance is your homeowners insurance premium, usually $800–$1,500/yr, which your lender requires as a condition of the loan. Add HOA dues on top if your property has one, and PMI if your down payment is under 20%.

PMI and the 80% LTV Rule

PMI (Private Mortgage Insurance) protects the lender — not you — if you default, and it's required whenever your loan-to-value (LTV) ratio is above 80%, meaning your down payment is under 20%. It typically costs 0.5%–1% of your loan amount per year, split into your monthly payment. The good news is PMI isn't permanent: once your loan balance drops to 80% of your home's original value, you can request removal in writing. Federal law requires automatic removal at 78% LTV based on the original schedule.

How Your Down Payment and Credit Tier Affect Your Rate

Two factors move your interest rate more than anything else: down payment size and credit tier. A larger down payment lowers the lender's risk, which can shave a fraction of a percentage point off your quoted rate — and it also shrinks or eliminates PMI. Credit tier matters even more: borrowers in the top tier (typically 760+ FICO) routinely qualify for the best available rate, while each tier below that can add anywhere from 0.125% to over 1% to the quoted APR. On a $350,000 loan, a 0.5% rate difference adds up to tens of thousands of dollars in extra interest over 30 years — which is why it's worth checking your credit report and paying down revolving balances before you shop for a mortgage.

What's a Good Interest Rate Right Now?

Mortgage rates change daily. For the most accurate rate, get a quote from at least 3 lenders — even a 0.25% rate difference saves thousands over the life of a loan.

How Much House Can I Afford?

A common rule: your total monthly housing payment (PITI) should be no more than 28% of your gross monthly income. Use our Amortization Calculator to see the full 30-year picture, or our Rent vs Buy Calculator if you're still deciding.

The Complete Guide to Understanding Your Mortgage

A mortgage payment isn't just one number — it's a formula, a set of moving parts, and a series of tradeoffs between loan term, rate, and upfront cost. This guide walks through the math behind your monthly payment, what actually makes up that payment, how a 15-year loan stacks up against a 30-year loan on the same balance, and practical ways to bring your payment down before you sign anything.

How Mortgage Payments Are Calculated

Every fixed-rate mortgage payment — including the one this calculator produces — comes from the same standard amortization formula:

M = P × [r(1 + r)ⁿ] ÷ [(1 + r)ⁿ − 1]

Each variable in that formula represents something specific:

• M — the fixed monthly payment covering principal and interest (taxes, insurance, HOA, and PMI are added on top separately).
• P — the principal, meaning the loan amount you're borrowing after your down payment is subtracted from the purchase price.
• r — the monthly interest rate, found by dividing your annual interest rate by 12. A 6.5% annual rate becomes a monthly rate of 0.065 ÷ 12 = 0.005417.
• n — the total number of monthly payments over the life of the loan, or the loan term in years multiplied by 12. A 30-year loan has n = 360; a 15-year loan has n = 180.

Worked example: on a $300,000 loan at a 6.5% annual rate over 30 years, r = 0.005417 and n = 360. Plugging those into the formula gives a principal-and-interest payment of $1,896.20 per month. That figure never changes for the life of a fixed-rate loan — what shifts month to month is the split between principal and interest, since early payments are interest-heavy and later payments are principal-heavy as the balance shrinks. This calculator runs that exact formula in your browser every time you change an input, then layers your property tax, insurance, HOA, and PMI on top to show a full, realistic monthly total.

Key Components of a Monthly Housing Payment (PITI)

Lenders bundle five distinct costs into what shows up as a single monthly mortgage payment. Together, the first four are known by the acronym PITI:

• Principal — the part of your payment that pays down the actual amount you borrowed. Building principal is how you build home equity.
• Interest — the cost the lender charges for the loan, calculated on your remaining balance using the monthly rate (r) from the formula above. On a fixed-rate loan, the rate is locked, but the dollar amount of interest you pay drops every month as the balance shrinks.
• Property Taxes — set by your county or municipality, typically 0.5%–2% of your home's assessed value per year depending on where you live. Most lenders collect one-twelfth of your annual bill each month and hold it in an escrow account, then pay the county directly when the bill is due.
• Homeowners Insurance — required by every mortgage lender to protect the property against fire, storm, and other covered damage. National averages run roughly $800–$1,500 per year, though your actual premium depends on your home's value, location, and claims history. Like property taxes, this is usually collected monthly and escrowed.
• Private Mortgage Insurance (PMI) — not part of the PITI acronym, but a real cost for most buyers who put down less than 20%. PMI protects the lender, not you, in case of default, and typically costs 0.5%–1% of the loan amount annually. It's automatically removed once your balance drops to 78% of the home's original value, and you can request removal in writing once you hit 80%.

HOA dues are a sixth possible cost if your property is part of a homeowners association, but unlike PITI, HOA fees go to the association, not your lender, and don't build equity or get escrowed the same way.

15-Year vs. 30-Year Fixed Mortgages

The loan term you choose changes your monthly payment, your total interest cost, and how fast you build equity — often dramatically. The table below compares a $320,000 loan under a realistic rate for each term, since 15-year loans typically carry a lower rate than 30-year loans on the same day.

The 30-year loan wins on monthly affordability — nearly $670 less per month in this example, which can be the difference between qualifying for a loan and not. The 15-year loan wins on total cost and speed: it pays off in half the time and saves over $253,000 in interest on this loan size, because more of every payment goes to principal from day one instead of mostly interest. Equity builds roughly twice as fast on a 15-year loan for the same balance, since a larger share of each payment reduces principal rather than covering interest. The right choice usually comes down to whether your budget can absorb the higher 15-year payment without straining other financial goals like retirement savings or an emergency fund.

Strategies to Lower Your Monthly Payment

If the payment this calculator shows is higher than you'd like, several levers can bring it down before you ever talk to a lender:

1. Make a larger down payment. Every dollar you put down reduces the principal (P) in the formula directly, which lowers your payment. Crossing the 20% threshold also eliminates PMI entirely, which can cut $100–$300+ off your monthly payment depending on loan size.
2. Buy discount points. Discount points let you pay an upfront fee at closing — typically 1% of the loan amount per point — in exchange for a lower interest rate, often around 0.25% per point. This lowers r in the formula for the life of the loan, which is worth it if you plan to stay in the home long enough to recoup the upfront cost through lower payments.
3. Improve your credit score before applying. Credit tier is one of the biggest drivers of your quoted rate. Paying down revolving balances, avoiding new credit inquiries, and fixing any reporting errors in the months before you apply can move you into a better pricing tier and meaningfully lower r.
4. Shop multiple lenders. Rates and fees vary between lenders for the exact same borrower profile. Getting quotes from at least three lenders and comparing APR — not just the headline rate — routinely turns up differences worth thousands over the life of the loan.
5. Consider a longer loan term. Stretching the same balance over 30 years instead of 15 (or 20 instead of 15) lowers the monthly payment by spreading principal over more payments — the tradeoff being more total interest paid, as shown in the comparison table above.
6. Reduce escrowed costs where possible. Shopping homeowners insurance annually, and confirming your property's tax assessment is accurate (and appealing it if it isn't), can lower the T and I portions of PITI without touching your loan terms at all.

Frequently Asked Questions (FAQ)