How this calculator works
Your mortgage payment has two layers. The first is principal and interest, the fixed amount that pays down your loan. The second is everything your lender collects on top: property tax, homeowners insurance, private mortgage insurance (PMI) and, if you have one, a homeowners association fee. Lenders often call the full payment PITI, short for principal, interest, taxes and insurance.
This calculator works out the principal and interest with the standard amortization formula, then adds your tax, insurance, PMI and HOA costs as monthly amounts. PMI drops off automatically once your balance reaches 78% of the home's original price, which is when US lenders are required to cancel it.
The formula
The monthly principal and interest payment is:
Here, P is the loan amount (home price minus down payment), r is the monthly interest rate (annual rate ÷ 12) and n is the number of monthly payments (years × 12).
Example calculation
Say you buy a $400,000 home with 20% down on a 30-year loan at 6.5%.
- Loan amount
- $320,000
- Principal and interest
- $2,022.62
- Property tax (1.1%)
- $366.67
- Home insurance
- $150.00
- Monthly payment
- $2,539.29
Over 30 years you'd pay about $408,000 in interest, more than the loan itself. That's why even small rate differences matter.
Ways to lower your payment
- Put down 20% if you can. It removes PMI, which can add $100 to $300 a month.
- Shop at least three lenders. Rates on the same day can differ by half a percent.
- Consider a 15-year term. The payment is higher, but you'll pay far less interest overall.
- Pay a little extra each month. Try the extra payment field above to see the savings.
Frequently asked questions
What's the difference between interest rate and APR?
The interest rate is what you pay to borrow. APR includes the rate plus lender fees and points, so it's usually a bit higher. Use the interest rate in this calculator.
How much should my down payment be?
Conventional loans allow as little as 3%, and FHA loans 3.5%. Putting down 20% avoids PMI and lowers your monthly payment.
Does this include closing costs?
No. Closing costs are paid once at purchase and typically run 2% to 5% of the loan amount.