Mortgage Calculator
Work out your monthly house payment, including principal, interest, property tax and insurance, and see how much interest you will pay over the life of the loan.
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Buying a home is the biggest purchase most people ever make, and the monthly payment is the number that decides whether it is comfortable or a stretch. This calculator gives you that number in seconds. It also shows the parts that are easy to overlook: property tax, insurance, and the huge amount of interest a long loan adds to the price.
How to use the mortgage calculator
- Enter the home price and your down payment in dollars. The loan amount is the difference between the two.
- Add your interest rate. Use the annual rate from your lender quote, not the APR.
- Choose the loan term. 30 and 15 years are the most common.
- Add property tax and insurance as yearly amounts to see your full payment. Set them to 0 if you only want principal and interest.
Results update as you type, so you can quickly test what happens with a bigger down payment or a lower rate.
The mortgage payment formula
The principal-and-interest part of a fixed-rate mortgage comes from the standard amortization formula:
M = P × r ÷ (1 − (1 + r)^−n)- M is the monthly principal and interest payment
- P is the loan amount (price minus down payment)
- r is the monthly interest rate (annual rate ÷ 12 ÷ 100)
- n is the number of monthly payments (years × 12)
Tax and insurance are then divided by 12 and added on top.
Worked example
Say you buy a $400,000 home with $80,000 down, so the loan is $320,000, at 6.5% for 30 years:
- r = 0.065 ÷ 12 ≈ 0.0054167, and n = 360
- M = 320,000 × 0.0054167 ÷ (1 − 1.0054167^−360) ≈ $2,022.62 per month
Add $4,800 a year in property tax ($400 a month) and $1,500 in insurance ($125 a month), and the full payment comes to about $2,547.62. Over 30 years you would pay roughly $408,000 in interest, more than the loan itself.
How to lower your monthly payment
- Put more down. Every extra $10,000 down cuts about $63 a month off the payment in the example above. Reaching 20% down also usually removes PMI.
- Improve your credit score before you apply. Even a 0.5 percentage point lower rate can save tens of thousands of dollars over the loan.
- Compare lenders. Rates and fees vary more than most people expect. Get at least three quotes on the same day.
- Consider buying points. Paying a fee upfront to lower the rate can pay off if you plan to stay in the home for many years.
- Appeal your property tax assessment if it looks too high compared with similar homes nearby.
How much house can I afford?
A common guideline is the 28/36 rule. Keep your total housing payment at or below 28% of your gross monthly income, and all your debt payments, including car loans and student loans, at or below 36%. On a $9,000 monthly income, that means a housing payment of about $2,520 at most. Treat this as a starting point, because your savings, job security and other goals matter just as much.
Frequently asked questions
What does PITI mean?
PITI stands for principal, interest, taxes and insurance, the four parts of a typical monthly mortgage payment. Lenders often collect taxes and insurance through an escrow account and pay those bills for you.
Does this calculator include PMI?
Not separately. If your down payment is under 20% of the price, a conventional lender will usually add private mortgage insurance, often around 0.3% to 1.5% of the loan per year. You can add that yearly amount to the insurance field to include it.
Is a 15-year or 30-year mortgage better?
A 15-year loan has higher monthly payments but usually a lower rate and far less total interest. A 30-year loan keeps payments lower and more flexible. The right choice depends on your budget and how fast you want to build equity.
How accurate is this estimate?
The principal and interest figure uses the standard amortization formula lenders use, so it is exact for a fixed-rate loan. Your real payment can still differ because of PMI, HOA fees and how your lender rounds numbers.