Mortgage Payment Calculator
Most mortgage calculators show you principal and interest and stop there. That number is typically only two thirds of what actually leaves your account each month. This one includes property tax, insurance, HOA dues and PMI, because those are the parts that turn an affordable-looking payment into an unaffordable one.
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What makes up a mortgage payment
Lenders call the full payment PITI: principal, interest, taxes and insurance. Principal and interest are the loan itself. Taxes and insurance are collected alongside it and held in escrow, then paid out on your behalf when they fall due.
Two more items often ride along. HOA or condo dues, if the property has them, are not part of the mortgage but are unavoidable and belong in any honest monthly figure. PMI applies when your down payment is under 20 percent, and it protects the lender rather than you.
Why PMI disappears
Private mortgage insurance is charged while your equity is thin. Once you reach 20 percent equity, it can be removed — automatically at 22 percent in many cases, or on request at 20 percent. On a large loan that is a meaningful monthly saving, and it is worth knowing roughly when you will reach it.
The rate matters more than the price
It is easy to focus on negotiating the purchase price and treat the interest rate as fixed. In practice a single percentage point on a thirty-year loan usually moves the monthly payment more than a sizeable price reduction does, and it moves the total interest by a very large amount. Shopping the rate is generally worth more per hour spent than shopping the price.
Escrow figures change
Property tax assessments and insurance premiums are re-evaluated periodically, and both have moved sharply in some markets. A payment that is comfortable at today's escrow can become uncomfortable after a reassessment, so leave headroom rather than budgeting to the last dollar.
Frequently asked questions
What is included in a monthly mortgage payment?
Principal, interest, property tax and home insurance, usually collected together. Add HOA dues if the property has them, and PMI if your down payment was under 20 percent.
How much house can I afford?
A common guideline is that housing costs stay under 28 percent of gross income, with all debt under 36 percent. Run the numbers through the home affordability calculator, which starts from income rather than from a price.
Is a 15-year mortgage better than a 30-year?
It costs far less in total interest and builds equity much faster, but the monthly payment is substantially higher. The 30-year gives flexibility: you can always pay extra voluntarily, but you cannot lower a 15-year payment in a bad month.
Does a bigger down payment lower my rate?
Sometimes. It always reduces the loan and removes PMI at 20 percent, and some lenders price better rates at lower loan-to-value ratios.