🏠 Mortgage Calculator

Use our mortgage calculator to estimate your total monthly home loan payment in seconds. Enter the home price, down payment, interest rate, and loan term, then add property tax, homeowner’s insurance, PMI, and HOA fees to see the full picture. The tool works for conventional, FHA, and VA loan scenarios.

Knowing your true monthly cost—not just principal and interest—helps you set a realistic budget before you start house hunting. Adjust the inputs to compare different down-payment amounts, loan terms, and rates side by side.

How Does a Mortgage Work?

A mortgage is a secured loan used to buy real estate, with the property itself serving as collateral. In the United States, the most common type is the 30-year fixed-rate mortgage, where the interest rate stays the same for the entire life of the loan. Other popular options include 15-year fixed loans and adjustable-rate mortgages (ARMs), which start with a lower rate that resets periodically after an introductory period.

Each monthly payment is split between principal (paying down the loan balance) and interest (the lender’s fee for borrowing). In the early years, most of the payment goes toward interest; the share going to principal increases over time through a process called amortization.

What Is Included in a Monthly Mortgage Payment

Your total monthly housing cost typically has five components, often summarized as PITI + extras:

  • Principal & Interest (P&I): The core loan repayment, determined by the loan amount, rate, and term.
  • Property Tax: An annual tax levied by your local government, usually 0.5% to 2.5% of the assessed home value, divided into twelve monthly installments paid through escrow.
  • Homeowner’s Insurance (HOI): Required by all lenders, this policy covers damage from fire, storms, and other perils. The national average is roughly $1,200–$1,500 per year.
  • Private Mortgage Insurance (PMI): Required if your down payment is less than 20%. PMI typically costs 0.5%–1% of the loan amount per year and can be removed once you reach 20% equity.
  • HOA Fees: Monthly dues charged by a homeowners association for condos, townhomes, or planned communities. Not all properties have HOA fees.

Mortgage Payment Formula

The monthly principal-and-interest payment is calculated with the standard amortization formula:

M = L × [r(1 + r)n] ÷ [(1 + r)n − 1]

Where: L = loan amount, r = monthly interest rate (annual rate ÷ 12), n = total number of payments (years × 12). Property tax, insurance, PMI, and HOA are then added to M to arrive at the total monthly cost.

Practical Examples

Example 1 — 30-year fixed, 20% down: Home price $400,000, down payment $80,000, loan $320,000 at 6.5%. Monthly P&I = $2,023. Add $333/mo property tax, $108/mo insurance → Total ≈ $2,464/mo.

Example 2 — 15-year fixed, same scenario: Monthly P&I jumps to $2,789, but you pay roughly $182,000 less in total interest over the life of the loan.

Example 3 — Low down payment with PMI: Same home, only 5% down ($20,000), loan $380,000 at 6.75%. Monthly P&I = $2,465, plus PMI of about $158/mo, property tax $333/mo, insurance $108/mo → Total ≈ $3,064/mo.

Tips for Homebuyers

The 28/36 Rule: A widely used guideline says your total housing costs should not exceed 28% of gross monthly income, and total debt payments should stay under 36%. Lenders use these ratios (called DTI—debt-to-income) when qualifying borrowers.

Boost your down payment to avoid PMI. Reaching 20% down eliminates PMI, which can save $100–$300 per month. Some lenders offer “lender-paid PMI” in exchange for a slightly higher interest rate—worth comparing.

Shop multiple lenders. Even a 0.25% difference in rate on a $300,000 loan saves roughly $15,000 in interest over 30 years. Get quotes from at least three lenders before locking a rate.

Remember closing costs. Expect to pay 2%–5% of the loan amount in closing costs (appraisal, title insurance, origination fees). These are due at signing and are separate from your monthly payment.

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Frequently Asked Questions

How much house can I afford?
A common guideline is the 28/36 rule: spend no more than 28% of your gross monthly income on housing (mortgage, tax, insurance) and no more than 36% on total debt. For example, with a $6,000 gross monthly income, aim for a housing payment under $1,680.
When can I remove PMI?
You can request PMI removal once you reach 20% equity in your home (80% loan-to-value ratio). By law, your lender must automatically cancel PMI when your equity reaches 22%. You can accelerate this by making extra principal payments or if your home appreciates in value.
Is a 15-year or 30-year mortgage better?
A 15-year mortgage has higher monthly payments but saves a significant amount in total interest. A 30-year mortgage offers lower payments and more budget flexibility. The best choice depends on your income, savings goals, and comfort with monthly obligations.
What is the minimum down payment for a home?
It depends on the loan type. Conventional loans typically require 3%–5% down, FHA loans require 3.5%, and VA and USDA loans allow 0% down for qualifying borrowers. A 20% down payment avoids PMI on conventional loans.
How does the interest rate affect my payment?
On a $300,000 30-year loan, each 0.5% increase in rate adds roughly $90 to your monthly payment and about $32,000 in total interest over the loan term. Even small rate differences have a large cumulative impact.
What are closing costs?
Closing costs are fees paid at the time of purchase, typically 2%–5% of the loan amount. They include appraisal fees, title insurance, origination fees, attorney fees, and prepaid items like property tax and insurance escrow. On a $300,000 loan, expect $6,000–$15,000.