Mortgage Calculator

How the Mortgage Calculator Works

This mortgage calculator computes your full monthly housing payment, known as PITI: Principal, Interest, Taxes, and Insurance. The principal and interest portion uses the standard mortgage amortization formula — the same one used by lenders — to calculate the fixed monthly payment needed to repay the loan over the chosen term. Property tax and insurance amounts are divided by 12 and added to get the total monthly obligation.

Enter your home price, down payment, interest rate, loan term, annual property tax, and annual home insurance. Click Calculate Mortgage to see your full payment breakdown and total cost over the life of the loan.

Understanding PITI

Principal & Interest (P&I)

This is the core mortgage payment that goes to your lender each month. In early years, the majority is interest; later in the loan, more goes to principal. Over a 30-year term, a homebuyer may pay more in interest than the original price of the home — this is why comparing loan terms and rates matters so much.

Property Tax

Property taxes are levied by local governments and typically range from 0.5% to 2.5% of the home's assessed value per year, depending on location. In the US, the national average is approximately 1.1% annually. Lenders usually collect 1/12 of the annual amount with each mortgage payment and hold it in escrow.

Home Insurance

Homeowners insurance is required by virtually all mortgage lenders and protects against damage from fire, storms, theft, and other covered events. Annual premiums typically range from $800 to $2,500+ depending on the home value and location. Like taxes, lenders usually escrow this amount monthly.

Down Payment and PMI

A down payment of 20% or more eliminates the need for Private Mortgage Insurance (PMI), which can cost 0.5–1.5% of the loan amount per year. On a $350,000 home with a 10% down payment, PMI could add $100–$300 per month to your payment until you build 20% equity. This calculator does not include PMI — if your down payment is below 20%, add an estimate to your insurance field or factor it separately.

Many loan programs allow lower down payments: FHA loans allow 3.5% down; conventional loans may allow 3–5% down with PMI; VA loans often require no down payment for eligible veterans.

30-Year vs. 15-Year Mortgage

The choice between a 30-year and 15-year mortgage is one of the most consequential financial decisions a homebuyer makes. A 30-year mortgage has a lower monthly payment but costs significantly more in total interest. A 15-year mortgage has a higher monthly payment but saves tens of thousands — sometimes hundreds of thousands — in interest and builds equity twice as fast. Use this calculator with both term options to see the difference in your specific scenario.

How Much House Can You Afford?

A common rule of thumb is the 28/36 rule: your total housing payment (PITI) should not exceed 28% of your gross monthly income, and your total debt payments should not exceed 36%. Lenders use your Debt-to-Income ratio (DTI) to assess how much mortgage you qualify for. If your monthly gross income is $6,000, a 28% housing limit suggests keeping your PITI at or below $1,680 per month.