Mortgage Calculator
Estimate your full monthly mortgage payment including principal, interest, taxes, insurance, and HOA. Enter your price, down payment, and rate.
| Monthly breakdown | Amount |
|---|---|
| Principal & interest | $2,022.62 |
| Property tax | $366.67 |
| Home insurance | $150.00 |
| HOA dues | $0.00 |
| Total monthly payment | $2,539.29 |
Estimate. Excludes PMI (often required under 20% down) and closing costs. For the full payoff schedule, see our mortgage amortization calculator.
How to use this calculator
Fill in each field to build a realistic picture of your monthly housing cost:
- Home price — the purchase price of the property
- Down payment — enter a dollar amount or percentage; the loan amount is calculated automatically
- Interest rate — the annual rate quoted by your lender (not APR)
- Loan term — typically 15 or 30 years
- Annual property tax — enter as a rate (e.g., 1.1%) or dollar amount; your county assessor's website usually has this
- Annual homeowners insurance — your insurer or a quote can provide this
- HOA dues — enter your monthly HOA fee if applicable; enter 0 if none
The result is your full estimated monthly payment with a line-by-line breakdown of each component. Adjust the down payment or term to see how the payment changes.
How mortgage payments are structured
A monthly mortgage payment is made up of several distinct components, each serving a different purpose:
- Principal — the portion that reduces your loan balance and builds equity. Early in the loan, this is a small fraction of the payment; it grows each month as the balance falls.
- Interest — the cost of borrowing, charged on the remaining balance. It is the largest part of early payments on a 30-year mortgage.
- Property taxes — collected monthly by your lender into an escrow account and paid to the local government on your behalf. The rate varies widely by location.
- Homeowners insurance — protects the structure and contents of the home. Required by virtually all mortgage lenders as a condition of the loan.
- HOA dues — if applicable, paid to a homeowners association for shared amenities or services. These are separate from escrow and paid directly to the HOA.
The principal and interest (P&I) portion is fixed for the life of a fixed-rate mortgage. Taxes and insurance, however, can increase over time — property taxes are reassessed periodically, and insurance premiums change at renewal. This means your total monthly payment may drift upward even on a fixed-rate loan.
Worked example — step by step
Suppose you're buying a $400,000 home with a $80,000 down payment (20%), at 6.5% interest over 30 years. Your local property tax rate is 1.1% and homeowners insurance runs $1,200/year. No HOA.
- Loan amount: $400,000 − $80,000 = $320,000
- Monthly P&I: $320,000 amortized at 6.5% over 30 years ≈ $2,023
- Monthly property tax: ($400,000 × 1.1%) ÷ 12 = $367
- Monthly insurance: $1,200 ÷ 12 = $100
- HOA: $0
- Total estimated monthly payment: ≈ $2,490
Note that this does not include PMI (not needed with 20% down) or closing costs (typically 2–5% of the loan, paid upfront). If you put down only 5% ($20,000), the loan rises to $380,000, P&I jumps to about $2,402, and PMI could add another $100–$250 per month.
How to interpret your result
The most important number to benchmark is your payment as a percentage of gross monthly income. Many lenders use two ratios:
- Front-end ratio (housing ratio): total PITI ÷ gross monthly income, ideally under 28–31%.
- Back-end ratio (total DTI): all monthly debt payments (PITI + car, student loans, credit cards) ÷ gross monthly income, ideally under 43%.
These are guidelines, not hard rules, but they reflect the limits most lenders apply. If your estimated payment pushes these ratios high, consider a larger down payment, a less expensive home, or waiting to reduce other debts.
Common mistakes to avoid
- Using a rate that's too low. The rate you'll actually get depends on your credit score, debt-to-income ratio, loan type, and lender. Use a conservative estimate or get a rate quote before relying on this calculation for budgeting.
- Forgetting property taxes in the monthly budget. A 1–2% property tax rate on a $400,000 home adds $333–$667 per month. Underestimating taxes is one of the most common ways buyers overestimate affordability.
- Assuming PMI goes away automatically. If you put less than 20% down, PMI is typically required until you reach 20% equity based on the original purchase price. Under federal law, you can request cancellation at that point, but the lender won't remove it automatically until 22% equity is reached.
- Not budgeting for maintenance. Homeownership costs extend beyond the mortgage payment. A common rule of thumb is to budget 1–2% of the home's value per year for repairs and maintenance.
- Comparing payments without comparing terms. A 15-year loan has a higher payment than a 30-year, but the total interest paid is dramatically less. If you can afford the higher payment, the long-run cost difference is worth evaluating carefully.
The formula
P&I Payment = Loan × [ r(1 + r)n ] ÷ [ (1 + r)n − 1 ]
Where: Loan = home price − down payment, r = annual rate ÷ 12, n = years × 12.
Total Payment = P&I + (Annual Property Tax ÷ 12) + (Annual Insurance ÷ 12) + Monthly HOA
Estimate only — not a loan offer. PMI and closing costs are not included.
How we calculate this
Principal and interest are computed using the standard fixed-rate amortization formula on the loan amount (home price minus down payment). We then add monthly property tax (annual tax ÷ 12), homeowners insurance (annual premium ÷ 12), and HOA dues to arrive at the total estimated monthly payment. PMI and closing costs are not included. This is an estimate for planning purposes and is not a loan commitment or offer.
Sources
Frequently asked questions
What is included in a monthly mortgage payment?
A typical payment has four core parts, called PITI: principal, interest, property taxes, and homeowners insurance. HOA dues may add to it as well. PMI (private mortgage insurance) is another common addition when the down payment is under 20%. This calculator includes principal, interest, property tax, insurance, and HOA, but not PMI.
How much should my down payment be?
A 20% down payment avoids private mortgage insurance and lowers your loan balance, resulting in a lower monthly payment and less total interest. Many buyers put down less — some programs allow 3% to 5% down — but PMI adds to the cost until you reach roughly 20% equity. A larger down payment also signals lower risk to lenders, which can secure a better rate.
What is PITI?
PITI stands for principal, interest, taxes, and insurance — the four main components of a monthly mortgage payment that lenders use when calculating your housing expense ratio. Lenders typically want your total PITI payment to be no more than 28–31% of your gross monthly income, depending on the loan program.
Does this calculator include PMI?
No. If your down payment is under 20%, lenders usually require private mortgage insurance (PMI), which can add roughly 0.3–1.5% of the loan balance per year to your payment. Factor that in separately when evaluating affordability with a smaller down payment.
What is a debt-to-income ratio and why does it matter?
Your debt-to-income (DTI) ratio is your total monthly debt payments divided by your gross monthly income. Most conventional lenders prefer a DTI at or below 43%, and many want your housing costs (PITI) below 28–31% alone. A higher monthly mortgage payment raises your DTI, which can affect your ability to qualify for the loan.
How does the interest rate affect the total cost?
Even small rate differences add up significantly over 30 years. On a $320,000 loan, a rate of 6.5% versus 7.5% means roughly $230 less per month and about $83,000 less in total interest over the full term. Shopping multiple lenders and comparing APRs can uncover meaningful savings.
Are property taxes and insurance included in every mortgage payment?
Not always, but usually. Most lenders collect one-twelfth of your annual property tax and homeowners insurance premium each month into an escrow account, then pay those bills when due. If you waive escrow (some lenders allow this with sufficient equity and a fee), you pay those bills directly — but the total annual cost is the same.
What is the difference between a fixed-rate and adjustable-rate mortgage?
A fixed-rate mortgage locks in the interest rate — and therefore the principal-and-interest payment — for the entire term. An adjustable-rate mortgage (ARM) starts with a fixed period (often 5 or 7 years), then adjusts periodically based on a market index. ARMs can offer lower initial rates but carry the risk that payments will increase when the rate adjusts.