Mortgage Calculator

Calculate your monthly mortgage payment with taxes, insurance, and PMI.

Home Price ($)

Down Payment ($)

Interest Rate (%)

Loan Term

Annual Property Tax ($)

Annual Home Insurance ($)

How to Use the Mortgage Calculator

Enter the home purchase price, your down payment amount, interest rate, and loan term. Optionally add annual property tax and home insurance costs. Click "Calculate Payment" to see your total monthly payment broken down into principal and interest, taxes, insurance, and PMI. The calculator also shows the total interest paid and total cost over the life of the loan.

Understanding the Mortgage Payment Formula

The monthly principal and interest payment uses the standard amortization formula:

M = P × [r(1+r)^n] / [(1+r)^n - 1]

Where M is the monthly payment, P is the principal loan amount, r is the monthly interest rate (annual rate divided by 12), and n is the total number of payments (years × 12). This formula ensures equal monthly payments throughout the loan term.

Components of a Mortgage Payment

Principal and Interest

The largest part of your payment goes toward repaying the loan principal and interest. Early in the loan, most of the payment covers interest. Over time, a larger portion goes toward principal. This is called amortization.

Property Taxes

Property taxes are assessed by local governments and typically range from 0.5% to 2.5% of the home value annually. Lenders usually collect property tax monthly as part of your mortgage payment and pay it on your behalf from an escrow account.

Home Insurance

Homeowners insurance protects against damage from fires, storms, theft, and liability. Lenders require insurance to protect their investment. Annual premiums vary based on location, home value, and coverage level.

PMI (Private Mortgage Insurance)

If your down payment is less than 20% of the home price, lenders require PMI. This insurance protects the lender if you default. PMI typically costs 0.5% to 1% of the loan amount annually and can be removed once you reach 20% equity.

15-Year vs. 30-Year Mortgage Comparison

Factor	15-Year	30-Year
Monthly Payment	Higher	Lower
Interest Rate	Typically 0.5-1% lower	Higher
Total Interest Paid	Much less	Much more
Equity Building	Faster	Slower

Tips for Getting the Best Mortgage

Aim for a 20% down payment to avoid PMI and get better rates.
Shop multiple lenders — rates can vary by 0.5% or more, significantly affecting total cost.
Keep your debt-to-income ratio below 36% for the best approval odds.
Consider paying points (prepaid interest) to lower your rate if you plan to stay long-term.
Factor in closing costs (typically 2-5% of the loan amount) when budgeting for a home purchase.

Frequently Asked Questions

How is a monthly mortgage payment calculated?

Monthly principal and interest is calculated using the amortization formula: M = P[r(1+r)^n] / [(1+r)^n - 1], where P is the loan amount, r is the monthly interest rate, and n is the total number of payments.

What is PMI and when is it required?

PMI (Private Mortgage Insurance) is required when your down payment is less than 20% of the home price. It typically costs 0.5% to 1% of the loan amount annually and protects the lender if you default on the loan.

What is the difference between 15 and 30 year mortgages?

A 15-year mortgage has higher monthly payments but significantly less total interest paid. A 30-year mortgage has lower monthly payments but costs much more in interest over the loan life.

Does this calculator include property taxes?

Yes. Enter your annual property tax and home insurance amounts, and the calculator will include them in your monthly payment breakdown. These escrow payments are typically required by lenders.

How much house can I afford?

A common guideline is the 28/36 rule: spend no more than 28% of gross monthly income on housing costs, and no more than 36% on total debt payments. Use this calculator to test different home prices against your budget.

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