Mortgage Calculator
Estimate your full monthly mortgage payment — principal, interest, property taxes, insurance, PMI, and HOA — plus total interest over the life of the loan.
How the mortgage payment formula works
The principal-and-interest portion of your payment comes from the standard amortization formula used by every U.S. lender:
- M — monthly principal & interest payment
- P — loan amount (home price minus down payment)
- r — monthly interest rate (annual rate ÷ 12 ÷ 100)
- n — number of monthly payments (years × 12)
Escrow items are then added on top: one-twelfth of your annual property tax and homeowners insurance, monthly PMI if your down payment is under 20%, and any HOA dues.
Buying a $400,000 home with 20% down ($80,000) on a 30-year loan at 6.5%:
P = $320,000 · r = 0.065 ÷ 12 = 0.005417 · n = 360
M = 320,000 × [0.005417 × 1.005417360] ÷ [1.005417360 − 1] ≈ $2,023 per month
Over 30 years you would pay about $408,000 in interest — more than the original loan amount. Add $400/mo tax and $150/mo insurance and the full payment is roughly $2,573/mo.
Principal vs. interest over the life of a loan
Every fixed-rate mortgage follows the same shape: interest dominates the early payments and shrinks steadily as the balance goes down, while the principal share grows the opposite way. The two lines cross roughly two-thirds of the way through a 30-year term. This is why paying even a little extra toward principal in the early years — when interest still makes up most of the payment — saves disproportionately more than the same extra dollar later on.
What's included in a monthly mortgage payment
| Component | What it is | Typical amount |
|---|---|---|
| Principal | Pays down the loan balance | Grows over time |
| Interest | Cost of borrowing, on the remaining balance | Largest share early on |
| Property tax | Collected monthly into escrow | 0.5%–2.5% of value/yr |
| Home insurance | Required by the lender | $1,000–$3,000/yr |
| PMI | Required under 20% down (conventional loans) | 0.3%–1.5% of loan/yr |
| HOA fees | If the property is in an association | Varies |
How to read your result
Lenders generally like to see your total housing payment stay under 28% of gross monthly income, and all debt payments combined under 36% (the 28/36 rule — try our house affordability calculator to work backward from your income). If PMI shows in your result, remember it isn't forever: on conventional loans it can be removed once you reach 20% equity, which you can reach faster with extra payments.
Also note that the interest rate has an outsized effect: on the example above, one extra percentage point (7.5% instead of 6.5%) raises the payment by about $215/month and adds roughly $77,000 of interest over 30 years. That's why comparing lender quotes and considering refinancing when rates drop matters so much.
Common mistakes when estimating a mortgage payment
A few habits reliably lead buyers to underestimate what a home will actually cost them each month:
- Quoting principal and interest only. The number a rate calculator or ad shows is rarely the number that hits your bank account — taxes, insurance, and PMI routinely add $500–$1,000/month on a median-priced home. Always compare the fully-loaded payment, not just P&I.
- Assuming PMI is permanent. PMI ends once you reach 20% equity, either through payments or appreciation, but only if you request removal (or it hits 22% automatically under federal law) — it doesn't cancel itself early.
- Using the list price instead of the accepted offer. Your loan amount is based on the accepted price and appraisal, not the listing — re-run the calculator once an offer is accepted, and again if the appraisal comes in different.
- Skipping maintenance and closing costs. This calculator estimates the recurring payment; it doesn't include one-time closing costs (typically 2–5% of the loan) or ongoing maintenance (a common rule of thumb is 1% of home value per year), both of which affect whether the payment is truly affordable.
Frequently asked questions
How is a monthly mortgage payment calculated?
The principal-and-interest portion uses the amortization formula M = P × r(1+r)n / ((1+r)n − 1), where P is the loan amount, r the monthly rate, and n the number of payments. Taxes, insurance, PMI, and HOA fees are added on top.
What is PMI and when do I have to pay it?
Private mortgage insurance is typically required on conventional loans with less than 20% down. It costs about 0.3%–1.5% of the loan amount per year and can be removed once you reach 20% equity.
How much of my payment goes to interest vs. principal?
Early on, mostly interest — about 85% of the first payment on a 30-year loan at 6.5%. The split flips over time; see the full month-by-month breakdown in our amortization calculator.
Does this calculator include property taxes and insurance?
Yes — enter annual amounts and it adds one-twelfth of each to the monthly payment, like a lender escrow account. Leave them at zero for a principal-and-interest-only estimate.
Should I choose a 15-year or 30-year mortgage?
A 15-year loan carries a higher monthly payment but a lower rate and dramatically less lifetime interest; a 30-year loan lowers the payment and adds flexibility. See our full 15- vs. 30-year comparison for the break-even math.
How much down payment do I actually need?
Conventional loans can go as low as 3–5% down, FHA loans as low as 3.5%, but anything under 20% typically triggers PMI. Use the down payment calculator to see how different down payment sizes change your loan amount and PMI exposure.
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Note: This calculator provides estimates for educational purposes using the standard amortization formula. Actual loan terms, rates, taxes, and insurance costs vary by lender, location, and borrower profile. It is not financial advice — confirm figures with your lender. Formula: standard fixed-rate amortization. Last reviewed: July 2026.