How to Use This Calculator
- Enter purchase price & down payment: Providing at least 20% down avoids PMI fees.
- Input interest rate & term: Select standard 15-year or 30-year fixed terms.
- Include escrow taxes & insurance: Local property taxes and insurance vary by county and state.
Formula and Calculation Steps
Monthly P&I = L × [r(1 + r)ⁿ] / [(1 + r)ⁿ - 1]
Total Payment = P&I + (Annual Tax ÷ 12) + (Insurance ÷ 12) + PMI + HOAWorked Examples and Reference Table
| Home Price | Down Payment (20%) | Loan Amount | Monthly P&I (6.5%) |
|---|---|---|---|
| $250,000 | $50,000 | $200,000 | $1,264 / mo |
| $350,000 | $70,000 | $280,000 | $1,770 / mo |
| $450,000 | $90,000 | $360,000 | $2,275 / mo |
| $600,000 | $120,000 | $480,000 | $3,034 / mo |
Frequently Asked Questions
What is included in a monthly mortgage payment (PITI)?
A standard mortgage payment consists of Principal (paying down the loan balance), Interest (the lender’s fee), Taxes (local property taxes held in escrow), and Insurance (homeowners hazard insurance plus private mortgage insurance if applicable).
What is Private Mortgage Insurance (PMI)?
PMI is an extra insurance fee required by conventional lenders if your down payment is less than 20% of the home purchase price. It protects the lender in case of default and is typically canceled once you reach 20% equity.
How does loan term affect total interest?
A 15-year mortgage has higher monthly payments than a 30-year mortgage, but significantly lower overall interest costs because the principal is paid down twice as fast at a typically lower interest rate.
How are property taxes and homeowners insurance calculated?
Annual property taxes and insurance premiums are divided by 12 and placed into an escrow account monthly, from which the mortgage servicer pays the municipality and insurer annually.
Can I pay extra principal each month?
Yes, most conventional mortgages have no prepayment penalty. Making additional principal payments reduces total interest and pays off your mortgage years earlier.