Mortgage Calculator

Your monthly payment is made up of four main parts, often called PITI: principal (paying down the loan), interest (the cost of borrowing), property taxes, and homeowners insurance. Depending on your situation, you may also pay HOA dues and private mortgage insurance (PMI).

Principal and interest are calculated with the standard amortization formula. Every payment covers that month's interest first, and the rest goes toward the loan balance. Early in the loan, most of each payment is interest. Over time, the balance shrinks, less interest accrues, and more of each payment goes to principal.

Say you buy a $400,000 home with 20% down ($80,000), borrowing $320,000 at an example rate of 6.5% for 30 years:

• Monthly principal and interest: $2,022.62
• Total interest over 30 years: about $408,142
• Total paid for the loan: about $728,142

Property tax, insurance, and any HOA dues are added on top of that $2,022.62.

Using the same $320,000 loan at an example rate of 6.5%:

• 30-year: $2,022.62 a month, about $408,142 in total interest
• 15-year: $2,787.54 a month, about $181,758 in total interest

The 15-year loan costs about $765 more per month but saves roughly $226,000 in interest. In practice, 15-year loans usually also come with a lower interest rate, which widens the savings further. A 30-year loan keeps monthly payments lower and leaves more room in your budget.

Private mortgage insurance is usually required on conventional loans when you put down less than 20%. It protects the lender, not you, and this calculator estimates it at roughly 0.5% of the loan amount per year. On a $360,000 loan (10% down on a $400,000 home), that is about $150 a month.

PMI is not permanent. Many lenders remove it once your balance reaches 80% of the home's original value, and it ends automatically at 78%. This calculator's amortization summary marks the year PMI drops off.

A common guideline is the 28/36 rule: keep total housing costs under 28% of your gross monthly income, and all debt payments (housing, car, student loans, credit cards) under 36%. For example, with a $120,000 household income ($10,000 a month), that suggests keeping your full mortgage payment around $2,800 or less. Lenders use their own rules, so treat this as a starting point.

Extra payments go straight to the balance and cut total interest, though this calculator's schedule is based on your entered payment. On the $320,000, 30-year example above, adding $200 a month to each payment would pay the loan off about 6 years and 7 months early and save roughly $105,000 in interest.

A $400,000 loan at 6.5% fixed for 30 years has a principal and interest payment of $2,528.27 a month. Over 360 payments you pay $510,177.95 in interest, more than the amount you borrowed, for a total of $910,177.95.

The payment never changes, but the split does. In month 1, $2,166.67 of the $2,528.27 goes to interest. Principal does not overtake interest until payment 233, more than 19 years in. After 10 years you still owe $339,105, about 85% of the original loan.

The same loan over 15 years costs $3,484.43 a month, about $956 more, but total interest drops to $227,197. That saves roughly $283,000.

• Property tax: set by your county or city as a percentage of the home's assessed value. Enter the yearly bill; the calculator divides it by 12. Lenders usually collect it monthly into an escrow account and pay the bill for you.
• Homeowners insurance: covers the house and your liability. Lenders require it. Enter the yearly premium; it is also commonly paid through escrow.
• HOA dues: monthly fees for condos and planned communities. They are usually paid to the association directly, not to the lender, but they still count toward what you can afford.

Taxes and insurance can rise every year, so the total monthly payment shown here is a starting point. Only the principal and interest part stays fixed on a fixed-rate loan.

Private mortgage insurance protects the lender when you put down less than 20%. This calculator estimates it at 0.5% of the loan amount per year, a middle-of-the-road figure. Real quotes often run from about 0.3% to 1.5% depending on credit score and down payment.

On a conventional loan, you can ask the lender to cancel PMI once your balance reaches 80% of the home's original value, and it must end automatically at 78% if your payments are current. On a $400,000 home with 10% down ($360,000 at 6.5%), the balance reaches 80% at payment 95 (about 7 years 11 months) and 78% at payment 109 (about 9 years 1 month).

FHA loans are different: they use their own mortgage insurance premium with separate rules, and with less than 10% down it usually lasts for the life of the loan unless you refinance.

Use this Mortgage Calculator when you are buying a home and want the full monthly cost: principal and interest plus property tax, insurance, HOA dues and PMI. Use the Loan Calculator for car loans, personal loans and student loans, where you only need the payment, total interest and the effect of extra payments.

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• Guide: How mortgage amortization works →