Mortgage Calculator
Estimate your monthly house payment including principal, interest, property tax, insurance, PMI and HOA fees, with a full amortization schedule.
How the mortgage payment is calculated
A fixed-rate mortgage is repaid in equal monthly installments. Each installment covers that month's interest first, and whatever is left pays down the balance. Because the balance is largest at the start, early payments are mostly interest; by the final years they are mostly principal.
M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
- M is the monthly principal and interest payment.
- P is the amount borrowed: the home price minus your down payment.
- r is the monthly interest rate: the annual rate divided by 12, as a decimal.
- n is the number of monthly payments: years × 12.
The calculator then adds one-twelfth of your yearly property tax and insurance, any HOA dues, and private mortgage insurance (PMI) if you put down less than 20%. Lenders often collect tax and insurance through an escrow account, so this total is closer to what actually leaves your bank account each month.
Worked example
A $400,000 home with 20% down means borrowing $320,000. At 6.5% for 30 years, r = 0.065 ÷ 12 = 0.0054167 and n = 360. The principal and interest payment is $2,022.62. Add $400 a month for property tax and $125 for insurance and the full payment is about $2,547.62. Over 30 years you would pay roughly $408,000 in interest, more than the amount borrowed.
Ways to lower your mortgage cost
- Put down 20% or more to avoid PMI, which usually costs 0.3% to 1.5% of the loan per year.
- Compare a 15-year term. The payment is higher, but rates are usually lower and total interest often falls by more than half.
- Make one extra payment a year. On a 30-year loan this typically cuts four to six years off the term.
- Shop several lenders. A rate difference of 0.25% on $320,000 changes the payment by about $50 a month.
How much house can you afford?
A common rule of thumb is the 28/36 rule: keep housing costs under 28% of gross monthly income and all debt payments under 36%. With a $2,550 total payment, that suggests a gross income of at least $9,100 a month, or about $109,000 a year.
Frequently asked questions
Does this mortgage calculator include taxes and insurance?
Yes. Enter your yearly property tax and home insurance and the calculator adds one-twelfth of each to the monthly principal and interest payment, plus PMI and HOA fees if they apply.
What is PMI and when does it go away?
Private mortgage insurance protects the lender when you put down less than 20% on a conventional loan. In the US it can be cancelled once you reach 20% equity and must be dropped automatically at 22% equity.
Why is so much of my early payment interest?
Interest is charged on the outstanding balance, which is highest at the start of the loan. As the balance falls, the interest portion shrinks and more of each payment goes to principal.
Is a 15-year or 30-year mortgage better?
A 15-year loan has higher payments but a lower rate and far less total interest. A 30-year loan keeps payments affordable and leaves room in your budget. Many people take a 30-year loan and prepay when they can.
Last reviewed Oct 20, 2026. Results are estimates; check important decisions with a qualified professional.