What this calculator does
This mortgage calculator estimates what you would pay each month for a fixed-rate home loan. It starts with the part that goes to the lender, principal and interest, and then adds the other costs that usually arrive in the same monthly bill: property tax, homeowners insurance, homeowners association (HOA) dues and private mortgage insurance (PMI). Lenders call the first four together PITI, short for principal, interest, taxes and insurance.
Besides the monthly total, you get the loan amount, the total interest over the life of the loan, the total of every principal and interest payment, the number of months you would pay PMI, and a year-by-year table of principal paid, interest paid and the remaining balance.
How to use it
- Home price and down payment. Enter the price and the down payment as a percent of that price. The loan amount is the price minus the down payment.
- Interest rate and term. Use the annual rate from a lender's quote and choose 30, 20, 15 or 10 years. The calculator assumes a fixed rate for the whole term.
- Property tax and insurance. Enter the yearly amounts. Your county tax office and an insurance quote are good sources. The calculator divides each by 12.
- HOA dues. Enter the monthly amount, or leave it at zero.
- PMI rate. This is a yearly percent of the original loan amount. It is only used when your down payment is below 20%. A rate of 0.5% is a starting guess, and your actual rate depends on your credit score, loan type and down payment.
How the monthly payment is calculated
Principal and interest use the standard amortization formula for a fixed-rate loan. With the loan amount L, the monthly rate i (the annual rate divided by 12) and the number of payments n (years times 12):
Monthly P&I = L × i × (1 + i)n ÷ ((1 + i)n − 1)
Total monthly payment = P&I + yearly tax ÷ 12 + yearly insurance ÷ 12 + HOA + PMI
If the rate is zero, the payment is simply the loan divided by the number of months. The calculator works in whole cents. The monthly payment is rounded to the cent, each month's interest is rounded to the cent, and the last payment settles whatever is left so the balance ends at exactly $0.00. A real lender's servicing system may round slightly differently, so expect differences of a few cents.
PMI is charged each month at the yearly rate times the original loan amount, divided by 12. It is charged only while the scheduled balance at the start of the month is above 78% of the original home value.
Worked examples
Each example uses a $400,000 home, a 6.5% rate, $4,000 a year in property tax, $1,500 a year in insurance, no HOA dues and a 0.5% PMI rate where PMI applies. All figures come straight from this calculator.
| Scenario | Loan | Principal & interest | PMI | Total monthly | Total interest |
|---|---|---|---|---|---|
| 20% down, 30 years | $320,000 | $2,022.62 | $0.00 | $2,480.95 | $408,140.64 |
| 20% down, 15 years | $320,000 | $2,787.54 | $0.00 | $3,245.87 | $181,758.21 |
| 10% down, 30 years | $360,000 | $2,275.44 | $150.00 | $2,883.77 | $459,164.00 |
| 10% down, 15 years | $360,000 | $3,135.99 | $150.00 | $3,744.32 | $204,477.16 |
15 years versus 30 years. With 20% down, the 15-year loan raises the principal and interest payment by $764.92 a month, from $2,022.62 to $2,787.54. In return, total interest drops from $408,140.64 to $181,758.21. Whether the higher payment fits your budget is the real question.
10% down versus 20% down. Putting 10% down on the 30-year loan raises the total monthly payment from $2,480.95 to $2,883.77. Part of that is the larger loan and part is $150.00 a month of PMI. In this example PMI is charged for 109 months, which is $16,350.00 in total. In the first year of the 20% down loan, $3,576.76 goes to principal and $20,694.68 to interest, so early payments are mostly interest.
With 10% down and a 15-year term, PMI lasts only 37 months, because the balance falls to 78% of the home value much sooner.
What PITI and PMI mean
PITI stands for principal, interest, taxes and insurance. Principal is the part of your payment that reduces the loan balance. Interest is the lender's charge for borrowing. Property taxes and homeowners insurance are often collected by the lender every month and held in an escrow account, then paid on your behalf when the bills come due. The Consumer Financial Protection Bureau (CFPB) explains how escrow accounts work. HOA dues are normally paid to the association, not the lender, but they still belong in your monthly budget.
PMI is private mortgage insurance. Lenders commonly require it on a conventional loan when your down payment is less than 20%. It protects the lender, not you, if you stop paying.
When PMI ends. Under the federal Homeowners Protection Act, you have the right to ask your servicer to cancel PMI on the date your principal balance is scheduled to reach 80% of the home's original value, provided you meet the conditions. Your servicer must automatically terminate it on the date the balance is scheduled to reach 78% of the original value, if you are current on your payments. This calculator uses the 78% point. If you ask to cancel at 80%, you could stop paying a little sooner. For this purpose, original value generally means the lower of the contract sales price or the appraised value at purchase.
Frequently asked questions
- What is included in a mortgage payment?
- At minimum, principal and interest. Many payments also include property tax and homeowners insurance through escrow, and PMI if your down payment is under 20%. HOA dues are usually billed separately.
- Do I have to put 20% down?
- No. Many buyers put down less. The trade-off is a larger loan, more interest over time and usually PMI until you have built enough equity.
- Is the PMI rate the same for everyone?
- No. It depends on your credit score, the size of your down payment, the loan type and the insurer. Ask your lender for a quote and enter that rate.
- Why is my first-year payment mostly interest?
- Interest is charged on the remaining balance, which is highest at the start. As the balance falls, more of each fixed payment goes to principal.
- Will my payment change over time?
- Principal and interest stay the same on a fixed-rate loan. Your tax and insurance bills can change, and your lender may adjust your escrow payment. An adjustable-rate loan can change in other ways, which this calculator does not model.
- Does making extra payments help?
- Extra principal payments shorten the loan and cut total interest. They can also bring you to the PMI cancellation point sooner. This calculator does not include extra payments.
Important notes
This is an estimate for planning, not a loan offer, an approval or financial advice. Your actual rate, fees, closing costs, property taxes, insurance premiums and PMI depend on your lender, your credit and where the home is. Government-backed loans such as FHA, VA and USDA loans use different mortgage insurance or fee rules that this calculator does not model. The 78% PMI rule applies to conventional loans covered by the Homeowners Protection Act, and exceptions exist, so confirm the terms with your lender or servicer.