Mortgage Calculator

Calculate Mortgage Payment

$
%
%
%

Of home price, per year

$

Loan Amount

$280,000

Principal & Interest

$1,769.79

/month

Total Monthly Payment

$2,207.29

incl. tax & insurance

Total Interest

$357,125

over loan term

See how this is calculated

How This Calculation Works

This calculator first subtracts your down payment from the home price to find the loan amount, then applies the same amortization formula used for any fixed-rate loan to find the principal-and-interest (P&I) portion of your monthly payment.

On top of P&I, most homeowners also pay property tax and homeowners insurance every month, usually collected by the lender into an escrow account and paid on your behalf when the bills come due. This calculator estimates those two costs and adds them to P&I to give you a more realistic total monthly payment — often abbreviated PITI (Principal, Interest, Taxes, Insurance).

Note that this estimate doesn't include private mortgage insurance (PMI), which typically applies when your down payment is below 20%, or homeowners association (HOA) dues, which vary by property and aren't predictable from price alone.

Common Mistakes to Avoid

  • Forgetting PMI below 20% down. If your down payment is under 20% of the home price, lenders typically require private mortgage insurance, which can add $100–$300+ per month until you reach 20% equity.
  • Using a national average property tax rate. Property tax rates vary enormously by state and county — from under 0.5% to over 2% of home value per year. Look up your specific local rate rather than guessing.
  • Ignoring HOA fees. Condos and many planned communities charge monthly HOA dues that can add hundreds of dollars to your true housing cost — always ask before making an offer.
  • Budgeting to the maximum the calculator allows. Just because you qualify for a payment doesn't mean it's comfortable. Many financial planners recommend keeping total housing costs under 28% of gross monthly income.

Worked Example

Scenario: A $350,000 home with 20% down ($70,000), a 6.5% interest rate, a 30-year term, 1.1% annual property tax, and $1,400/year insurance.

Step 1 — Loan amount: $350,000 − $70,000 = $280,000.

Step 2 — Monthly P&I: Using the amortization formula with a 6.5% rate over 360 months ≈ $1,769.65.

Step 3 — Monthly tax: ($350,000 × 1.1%) ÷ 12 ≈ $320.83.

Step 4 — Monthly insurance: $1,400 ÷ 12 ≈ $116.67.

Step 5 — Total monthly payment: $1,769.65 + $320.83 + $116.67 ≈ $2,207.15.

Frequently Asked Questions

How much down payment do I need?
Conventional loans often require as little as 3–5% down, though 20% avoids private mortgage insurance (PMI). FHA loans can go as low as 3.5% down. A larger down payment reduces your loan amount, monthly payment, and total interest paid.
What is PMI and when does it go away?
Private mortgage insurance protects the lender if you default, and is typically required when your down payment is under 20%. By law, lenders must automatically cancel PMI once your loan balance reaches 78% of the home's original value, and you can request cancellation at 80%.
Why is my actual mortgage payment different from principal and interest?
Most lenders bundle property taxes and homeowners insurance into your monthly payment through an escrow account, along with PMI if applicable. This means your real monthly payment is usually higher than the P&I figure alone — this calculator's total includes tax and insurance for that reason.
Is a 15-year or 30-year mortgage better?
A 15-year mortgage has a higher monthly payment but a lower interest rate and dramatically less total interest paid. A 30-year mortgage has a lower, more manageable monthly payment but more total interest. The right choice depends on your monthly budget and long-term financial goals.

Related Calculators

LoanCompound InterestSavings GoalDebt Payoff