Mortgage Payment Calculator
Estimate the full monthly cost of owning a home — principal, interest, property tax, and homeowner's insurance — bundled into the single number lenders call PITI. Enter your loan amount, interest rate, loan term in years, annual property tax, and annual home insurance, and the calculator returns the monthly payment you would actually send (excluding PMI and HOA fees, which vary widely). This is the figure to compare against your monthly budget when deciding whether a home is affordable, and the figure mortgage lenders use to qualify you against debt-to-income limits.
About this calculator
The principal-and-interest portion uses the standard amortizing-loan formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan principal (home price minus down payment), r is the monthly interest rate (the annual rate divided by 12), and n is the total number of monthly payments (loan term in years × 12). This formula produces a fixed monthly payment such that, at the end of n payments, the loan balance is exactly zero. Early payments are mostly interest, late payments are mostly principal — that is amortization. This calculator then adds property tax and insurance, each divided by 12 to get the monthly escrow contribution, producing PITI: Principal + Interest + Taxes + Insurance. What is not included here: PMI (private mortgage insurance, typically 0.3–1.5% of the loan annually if your down payment is under 20%), HOA fees, condo dues, and one-time closing costs. Edge cases: a 0% interest rate breaks the formula (division by zero in the derivation), so it requires a separate case — simply P ÷ n. A 30-year mortgage at 7% on $400,000 costs about $2,661 just in principal and interest; the same loan at 4% costs $1,910 — the rate difference alone is $750 a month and $270,000 over the life of the loan. Over a 30-year mortgage, the borrower typically pays more in interest than in principal, which is why the interest-rate environment shapes housing affordability so dramatically.
How to use
Example 1 — Standard 30-year mortgage. You are buying a $400,000 house, putting 20% down ($80,000), so your loan amount is $320,000. The interest rate is 6.5%, the term is 30 years, annual property tax is $4,800, and annual home insurance is $1,500. Enter 320000, 6.5, 30, 4800, and 1500. Result: roughly $2,547 per month total — about $2,022 of principal and interest, plus $400 of property tax and $125 of insurance escrowed each month. Verify P&I: r = 0.065/12 ≈ 0.005417, n = 360, (1.005417)^360 ≈ 7.0145, so 320000 × (0.005417 × 7.0145) / (7.0145 − 1) ≈ 2,022. Add 4800/12 = 400 and 1500/12 = 125. Total ≈ $2,547. ✓ Example 2 — Shorter term, smaller loan. You are refinancing a $180,000 balance at 5.25% on a 15-year fixed, with $2,400 annual property tax and $900 annual insurance. Enter 180000, 5.25, 15, 2400, and 900. Result: roughly $1,722 per month — about $1,447 P&I, plus $200 property tax and $75 insurance. Verify P&I: r = 0.0525/12 ≈ 0.004375, n = 180, (1.004375)^180 ≈ 2.1949, so 180000 × (0.004375 × 2.1949) / 1.1949 ≈ 1,447. The 15-year term has a much higher monthly P&I than a 30-year would, but you pay roughly half the total interest over the life of the loan.
Frequently asked questions
What does PITI stand for and why does my full payment look bigger than the principal and interest?
PITI stands for Principal, Interest, Taxes, and Insurance — the four components that make up the full monthly housing payment for most borrowers. Principal is the portion that pays down your loan balance, interest is what the lender charges, taxes refers to property taxes collected by your local government, and insurance is your homeowner's policy premium. Lenders typically collect taxes and insurance in monthly escrow installments along with your loan payment, then pay the annual bills on your behalf. PITI is what mortgage lenders use to qualify you for a loan, not just principal and interest, because the full housing cost is what affects your ability to repay. If you live somewhere with high property taxes (parts of New Jersey, Illinois, or Texas), the tax portion can easily double the size of your payment compared to a low-tax state.
Why is so much of my early mortgage payment going to interest?
A fixed-rate amortizing mortgage charges interest on the remaining balance every month, and at the start the balance is at its maximum, so the interest charge is largest then. The monthly payment is held constant, so whatever is left after paying that month's interest goes to principal — which in the early years is a small slice. On a 30-year mortgage at 6.5%, the first payment of $2,022 (on a $320,000 loan) breaks down as about $1,733 interest and only $289 principal. Halfway through the loan the split is closer to 50/50, and in the final years almost all of each payment goes to principal. This is why extra principal payments early in a loan are so powerful — they shorten the entire interest schedule, not just the next month. Paying just one extra payment per year on a 30-year mortgage can shave 4–6 years off the term.
Should I take a 15-year or a 30-year mortgage?
A 15-year mortgage has a much higher monthly payment but cuts total interest paid by roughly half and builds equity dramatically faster. On a $320,000 loan at 6.5%, the 30-year option costs about $2,022 a month in P&I and roughly $407,000 in total interest over the life of the loan; the 15-year version (at typically a slightly lower rate, say 5.75%) costs about $2,659 a month but only about $158,000 in total interest. The 15-year option is the financially optimal choice if you can comfortably afford the higher payment and have already maxed out tax-advantaged retirement accounts. The 30-year option preserves cash flow flexibility — you can voluntarily pay extra principal in good months and fall back to the lower required payment in tight ones. Many borrowers split the difference by taking a 30-year and making prepayments equivalent to a 20- or 25-year schedule.
What are the most common mistakes people make when budgeting for a mortgage?
The first is shopping for a house based on the principal-and-interest payment alone and forgetting taxes, insurance, and PMI — your actual monthly cost can easily be 25–40% higher than the quoted P&I. The second is ignoring closing costs (typically 2–5% of the loan amount, paid up front) and ongoing maintenance, which the long-running rule of thumb is roughly 1–2% of the home value per year. The third is buying at the maximum a lender will approve: lenders typically allow up to a 43% back-end debt-to-income ratio, but that leaves almost no margin for retirement saving, emergencies, or life changes. The fourth is failing to lock the rate when getting an offer accepted; in a rising-rate environment a quarter-point move during the closing window can add tens of thousands over the loan's life. Finally, people forget that any down payment under 20% triggers PMI, which can add hundreds per month that this calculator does not include.
When should I not rely on this calculator?
Skip this calculator for adjustable-rate mortgages (ARMs), where the rate resets periodically — it cannot model rate changes mid-loan and will under- or over-state long-term cost depending on the rate path. It does not include PMI, HOA fees, mortgage points, or one-time closing costs, so do not use the output as your "all-in" housing budget without adding those separately. It assumes a fully amortizing loan, so it does not work for interest-only mortgages, balloon mortgages, or reverse mortgages. For figuring out how much house you can afford (working backward from your income), use a mortgage affordability calculator instead. And for the precise payment schedule month by month — useful when evaluating prepayments or refinances — use a full amortization schedule that shows interest and principal allocation per payment.