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The loan amount (price minus down payment) is amortized with the standard mortgage formula, which splits the balance into equal monthly payments of principal and interest. Early payments are dominated by interest — interest is charged on the remaining balance each month, so only a small slice reduces the debt at first. One-twelfth of annual property tax and insurance is added for the full PITI payment. This free mortgage payment estimator does not include PMI, HOA dues, closing costs or maintenance, since those vary by loan and location.
A fixed-rate mortgage is amortized: the balance is repaid in equal monthly instalments that combine principal and interest. The monthly principal-and-interest payment M comes from M = P × r(1+r)ⁿ ÷ ((1+r)ⁿ − 1), where P is the loan amount, r the monthly rate (annual rate ÷ 12) and n the number of payments. Interest is charged on the remaining balance each month, so early payments are mostly interest — this front-loaded interest is the heart of mortgage amortization. Worked example (numbers verified against the calculator): a $350,000 home with a $70,000 down payment leaves a $280,000 loan. At 6.5% over 30 years, the P&I payment is $1,769.79. The first payment splits into $1,516.67 of interest and just $253.12 of principal. Add property tax ($3,500/yr → $291.67/mo) and insurance ($1,800/yr → $150/mo) for a full PITI payment of $2,211.46. Over 360 payments the loan costs $357,124.57 in interest — more than the amount borrowed.
Enter the home price and your down payment — the calculator subtracts them to get the loan amount. Then add the annual interest rate and loan term in years, plus your estimated annual property tax and home insurance so the result reflects the real monthly cost, not just the loan portion. Select your currency to see figures in familiar units. Results update instantly: the total monthly payment, its principal-and-interest portion, the loan amount and the total interest you would pay over the full term. These are estimates, not professional financial advice — confirm rates, taxes and insurance quotes with qualified sources before making decisions. Use it as a quick mortgage affordability calculator: try different prices and rates to calculate the monthly payment you can comfortably afford before you talk to a lender.
PITI is the complete monthly housing payment: Principal (repays the loan balance), Interest (the lender's charge for borrowing), property Taxes (billed annually, collected monthly) and home Insurance (required by every lender). Many calculators and lender quotes show only principal and interest, which understates your real cost by roughly 25–40%. This mortgage payment breakdown starts from the amortized P&I figure, then adds one-twelfth of your annual tax and insurance bills so the total matches what actually leaves your account each month.
Property tax is usually 0.5%–2.5% of the home's value per year depending on your area, and homeowners insurance often runs $1,000–$3,000 a year in the US. You rarely pay these bills directly: your lender collects one-twelfth of each every month and holds it in an escrow account, then pays the county and the insurer on your behalf. That is why this calculator asks for annual amounts and divides by 12. Because tax assessments rise over time, your escrowed payment can change even on a fixed-rate loan.
How much down payment do you actually need? Many lenders accept 3-10% on conventional loans, though putting down less than 20% usually means PMI. This section explains how private mortgage insurance (PMI) works. On US conventional loans, lenders usually require PMI when the down payment is below 20% of the price — it protects the lender, not you, and typically costs 0.5%–1% of the loan amount per year. A larger down payment does three things: it shrinks the loan (and every payment with it), it can secure a slightly better rate, and at 20% it removes PMI entirely. Once your loan balance drops to about 78–80% of the original home value, PMI can usually be cancelled, which is one more reason early extra payments pay off.
The 15-year vs 30-year mortgage choice is the biggest cost lever a buyer has. On a $280,000 loan at 6.5%, the 30-year option costs $1,769.79 a month in P&I and $357,124.57 in total interest. The 15-year option costs $2,439.10 a month — $669.31 more — but total interest falls to $159,038.11, saving $198,086.46, and the loan is done in half the time. The 15-year mortgage is better if your income is stable and you plan to stay; the 30-year mortgage is better if you value lower payments, emergency-budget room, or plan to invest the difference.
A fixed-rate mortgage keeps the same rate — and the same P&I payment — for the entire term, so budgeting is simple and you are protected if rates rise. An adjustable-rate mortgage (ARM) starts with a lower introductory rate for 5, 7 or 10 years, then resets with the market. The adjustable rate can save money if you sell or refinance before the reset, but the payment can jump at exactly the wrong time. This calculator models a fixed rate; if you are considering an ARM, run the numbers at the highest rate the loan could reset to, not the teaser rate, to check you could afford it.
Because early mortgage payments are mostly interest, an extra payment strategy that targets principal early is unusually powerful. Every extra dollar comes straight off the balance that all future interest is charged on. One extra full P&I payment per year on a $280,000 loan at 6.5% for 30 years pays the loan off in about 24.3 years instead of 30 and saves roughly $78,400 in total interest. First check that your loan has no prepayment penalty, and confirm with your lender that extra payments are applied to principal rather than advancing the next due date.
A mortgage calculator also doubles as a rent-vs-buy gut check: compare the PITI payment against the rent of a similar home. Buying builds equity and locks in the P&I portion, while renting keeps you flexible and avoids taxes, insurance and maintenance. The classic rule of thumb is that maintenance averages about 1% of the home's value per year — on top of PITI. Run the numbers honestly on both sides before deciding. Remember: these are estimates, not professional financial advice; a qualified adviser can weigh your tax situation, job stability and local market before you commit.
PITI stands for Principal, Interest, Taxes and Insurance — the four parts of a typical monthly mortgage payment. Principal repays the loan, interest is the lender's charge, and property tax plus home insurance are collected monthly and held in escrow. This calculator estimates all four.
Not directly. Private mortgage insurance is usually required on US conventional loans when the down payment is below 20% of the price, and it is not modelled here because rates and rules differ by country and lender. If it applies to you, add one-twelfth of the annual PMI to this calculator's result.
A widely used guideline is the 28% rule: keep your total housing payment (PITI) at or below 28% of your gross monthly income. If you earn $7,000 a month before tax, aim for a PITI under about $1,960. Lenders also check your full debt-to-income ratio, usually capped around 36–43%.
A 15-year mortgage has higher monthly payments but far less total interest — on a $280,000 loan at 6.5%, the 15-year option saves about $198,000 in interest but costs roughly $669 more per month than the 30-year loan. Choose 15 years if your income is stable and you can absorb the payment; choose 30 years if you value cash-flow flexibility.
Dramatically. Because the rate applies to the whole balance for decades, a small difference compounds into tens of thousands of dollars. On a $320,000 30-year loan, a 1% rate increase adds roughly $200–215 to every monthly payment, or about $75,000–77,000 in extra interest over the loan's life.
Yes, if your loan has no prepayment penalty — most fixed-rate mortgages allow extra principal payments. Because early payments are mostly interest, extra principal paid early cuts the most future interest. One extra full P&I payment a year on a $280,000, 6.5%, 30-year loan shortens it to about 24.3 years and saves roughly $78,400 in interest.
An escrow account is a holding account managed by your lender. Each month the lender adds one-twelfth of your annual property tax and home insurance to your payment, then pays those bills for you when they come due. That is why this calculator divides your yearly tax and insurance by 12.
The interest rate is what you pay on the loan balance itself. The APR (annual percentage rate) rolls in points, fees and mortgage insurance to express the loan's true yearly cost, so the APR is usually a little higher than the note rate. Compare APRs, not just rates, when shopping lenders.
Refinancing can lower your payment if current rates are meaningfully below your existing rate, but it restarts costs: closing fees of 2–5% of the loan can take years to recoup. The break-even point is what decides it — if you expect to move or sell before it arrives, refinancing usually loses money even with a lower rate.