How the mortgage calculator works
Your lender quotes a rate on the loan amount, which is the home price minus your down payment. The principal-and-interest part of the payment is fixed for the life of a fixed-rate loan and is found with the standard amortization formula. The calculator then adds one-twelfth of your yearly property tax and insurance, private mortgage insurance (PMI) when you borrow more than 80% of the price, and any HOA dues. The result is the number that actually leaves your bank account each month.
The formula
M = P × r / (1 − (1 + r)−n), where P is the loan amount, r is the annual rate divided by 12, and n is the number of monthly payments. Early in the loan most of each payment is interest; over time the split shifts toward principal, which the amortization table below the result shows year by year.
Example
A $300,000 loan at 6.5% for 30 years has a principal-and-interest payment of about $1,896.20. Over 360 payments you would pay roughly $382,600 in interest. Adding just $200 a month toward principal pays the same loan off about seven years early and saves more than $100,000 in interest.
Tips before you buy
Property tax rates vary widely by county, so check your local rate rather than relying on a national average. PMI typically costs 0.3%–1.5% of the loan per year and can usually be removed once you reach 20% equity. Compare at least three lender quotes on the same day, because small rate differences add up to thousands of dollars.
Frequently asked questions
What is included in a mortgage payment?
Most payments include principal, interest, property tax and homeowners insurance (often called PITI). If you put less than 20% down on a conventional loan you will usually also pay PMI, and some properties add HOA dues.
How much house can I afford?
A common guideline is to keep your total housing payment under about 28% of gross monthly income and all debt payments under about 36%. Use our debt-to-income calculator to check your numbers.
Is a 15-year or 30-year mortgage better?
A 15-year loan has a higher payment but a lower rate and far less total interest. A 30-year loan keeps the payment flexible; you can still pay extra principal whenever you want.
When does PMI go away?
On conventional loans you can usually request PMI removal when your balance reaches 80% of the original value, and it ends automatically at 78%. FHA mortgage insurance follows different rules.
Results are estimates for educational purposes only and are not financial, tax, legal or medical advice. See our disclaimer. Last reviewed 2026-10-22.