Mortgage Calculator
Calculate monthly mortgage payments including principal, interest, property tax, and insurance. View a yearly amortization schedule. See also Loan Calculator and Compound Interest Calculator.
How to Calculate Mortgage Payments
A mortgage payment consists of four components, often called PITI: Principal, Interest, Taxes, and Insurance. The principal and interest portion is calculated using the standard amortization formula based on the loan amount (home price minus down payment), interest rate, and loan term. Property taxes and homeowner's insurance are added on top as monthly amounts. Most lenders require a minimum 20% down payment to avoid Private Mortgage Insurance (PMI).
Mortgage Payment Formula
M = P × r × (1 + r)^n / ((1 + r)^n − 1)
Where:
M = Monthly principal & interest payment
P = Loan amount (home price − down payment)
r = Monthly interest rate (annual rate / 12 / 100)
n = Total payments (years × 12)
Example
Home: $300,000, Down: $60,000, Rate: 6.5%, Term: 30 years
Loan = $300,000 − $60,000 = $240,000
r = 6.5 / 12 / 100 = 0.005417
n = 30 × 12 = 360
Monthly P&I = $1,517.09
+ Tax ($300/mo) + Insurance ($100/mo) = $1,917.09 total
Understanding Down Payments
The down payment is the upfront cash you pay toward the home purchase. A larger down payment means a smaller loan, lower monthly payments, and less total interest. Conventional loans typically require 5-20% down. FHA loans allow as low as 3.5%. If your down payment is less than 20%, most lenders require Private Mortgage Insurance (PMI), which adds 0.5-1% of the loan amount annually to your costs. Putting 20% or more down eliminates PMI and often qualifies you for better interest rates.
Mortgage Comparison Table
| Loan Amount | Rate | Term | Monthly P&I | Total Interest |
|---|---|---|---|---|
| $200,000 | 6% | 30 yrs | $1,199.10 | $231,676.38 |
| $200,000 | 6% | 15 yrs | $1,687.71 | $103,788.46 |
| $300,000 | 6.5% | 30 yrs | $1,896.20 | $382,633.19 |
| $300,000 | 6.5% | 15 yrs | $2,613.32 | $170,397.01 |
| $400,000 | 7% | 30 yrs | $2,661.21 | $558,035.97 |
| $500,000 | 7% | 30 yrs | $3,326.51 | $697,544.96 |
Frequently Asked Questions
How much house can I afford?
A common guideline is the 28/36 rule: spend no more than 28% of gross monthly income on housing costs and no more than 36% on total debt. For example, with a $6,000 monthly income, aim for housing costs under $1,680.
Should I choose a 15-year or 30-year mortgage?
A 15-year mortgage has higher monthly payments but much lower total interest — often less than half the interest of a 30-year loan. A 30-year mortgage offers lower monthly payments and more flexibility. Choose based on your budget and financial goals.
What is included in a mortgage payment?
A typical mortgage payment includes PITI: Principal (loan repayment), Interest (borrowing cost), Taxes (property tax), and Insurance (homeowner's insurance). Some payments also include PMI if the down payment was less than 20%.
What is a good mortgage interest rate?
Mortgage rates fluctuate based on economic conditions. Rates depend on your credit score, down payment, loan type, and term. Generally, a rate below the current national average is considered good. Check current rates from multiple lenders to compare.