Mortgage Calculator PRO

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Calculate your full mortgage payment including principal, interest, taxes, and insurance. Simulate extra payments and explore your amortization schedule. For personal or auto loans, see our loan calculator. Already have a mortgage? Check if you could save with our refinance calculator. Still saving for your down payment? Plan your timeline with the Savings Goal Calculator.

Calculate your full PITI payment, see how extra payments save you money, and explore your amortization schedule.

Loan Parameters
Advanced Options
Property Costs
Closing Costs

Typically 2-5% of property price

PMI (Private Mortgage Insurance)

Required when down payment is less than 20%

Extra Payments

Equivalent to ~1 extra payment per year

How we calculate: This calculator uses the standard amortization formula (fixed payments) at a constant interest rate. PITI components (taxes, insurance, HOA) are calculated separately and added to show your true monthly cost. PMI is based on current loan-to-value ratio.

How it works

The calculator determines your monthly payment using the annuity formula and adds PITI components:

  1. Loan Amount = Property Price - Down Payment
  2. P&I Payment = P × [r(1+r)^n] / [(1+r)^n - 1]
  3. Monthly Tax = Property Price × Tax Rate / 12
  4. Monthly Insurance = Annual Insurance / 12
  5. PMI = Loan Balance × PMI Rate / 12 (until LTV ≤ 80%)
  6. Total PITI = P&I + Tax + Insurance + HOA + PMI

Example Calculation

Property $400,000, down payment $80,000 (20%), 6.5% for 30 years, property tax 1.2%, insurance $1,500/yr:

With $200/mo extra payments, you'd save ~$82,000 in interest and pay off ~5 years early.

How Much Mortgage Can I Afford?

Determining your mortgage affordability starts with the 28/36 rule: your total housing payment (including principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income, and your total debt payments should stay under 36%. For a household earning $100,000 annually, this means a maximum PITI payment of roughly $2,333 per month.

Beyond the basic ratio, consider your complete financial picture. Emergency savings, retirement contributions, and lifestyle expenses all matter. A mortgage that technically qualifies may still strain your budget if other obligations are high. Use this calculator to see your full monthly cost including property taxes, insurance, HOA fees, and PMI before making a decision.

Lenders may approve you for more than what's comfortable. Just because you qualify for a $450,000 loan doesn't mean you should take it. Leaving room in your budget for maintenance costs (typically 1-2% of home value annually), unexpected repairs, and life changes provides financial security. Not sure if buying is better than renting in your situation? Our rent vs buy calculator runs a full break-even and net worth comparison.

Understanding PITI: Principal, Interest, Taxes, and Insurance

Your mortgage payment is more than just the loan itself. PITI represents the four main components that make up your total monthly housing obligation. Principal reduces your loan balance, interest is the cost of borrowing, property taxes fund local services, and homeowners insurance protects your investment.

In the early years of a mortgage, the majority of your payment goes toward interest rather than principal. On a 30-year mortgage at 6.5%, approximately 65% of your first payment is interest. This ratio gradually shifts over time, and by the final years, nearly all of your payment reduces the principal balance.

Many first-time buyers focus only on the principal and interest payment when budgeting, but taxes and insurance can add 20-40% to the base payment. In high-tax states like New Jersey or Illinois, property taxes alone can exceed $1,000 per month on a median-priced home. Always calculate the full PITI before committing to a purchase.

Fixed-Rate vs Adjustable-Rate Mortgages

A fixed-rate mortgage locks in your interest rate for the entire loan term, providing predictable payments. An adjustable-rate mortgage (ARM) offers a lower initial rate that resets periodically after an introductory period, typically 5 or 7 years. The choice between them depends on your timeline and risk tolerance.

Fixed-rate mortgages are ideal for buyers who plan to stay in their home long-term (7+ years) and prefer budget certainty. While the initial rate is higher than an ARM, you're protected from rate increases. In a rising-rate environment, this predictability becomes especially valuable.

ARMs can save money for shorter-term homeowners. A 5/1 ARM with a rate 1% lower than the fixed-rate alternative saves roughly $200/month on a $320,000 loan. However, if you're still in the home when the rate adjusts, your payment could increase significantly. Use the interest rate scenarios section above to see how different rates affect your payment.

How Extra Payments Save You Thousands

Making additional payments toward your mortgage principal is one of the most effective ways to build equity and reduce total interest. Because mortgage interest compounds on the remaining balance, every dollar of extra principal payment reduces future interest charges for every remaining month of the loan.

Consider a $320,000 mortgage at 6.5% over 30 years. The standard payment is $2,023/month with total interest of $408,274. Adding just $200/month in extra payments reduces total interest to approximately $326,000 — a savings of over $82,000 — and shortens the loan by about 5 years. Even occasional lump-sum payments can have a significant impact: a single $10,000 extra payment in year one saves roughly $25,000 in interest.

Biweekly payments offer another approach. By making half your monthly payment every two weeks, you make 26 half-payments (13 full payments) per year instead of 12. This single extra annual payment can reduce a 30-year mortgage by 4-6 years with minimal monthly impact on your budget.

PMI Explained: What It Is and How to Avoid It

Private Mortgage Insurance (PMI) is required by lenders when your down payment is less than 20% of the home's purchase price. PMI protects the lender — not you — in case of default. The cost typically ranges from 0.5% to 1% of the total loan amount annually, adding $133 to $267 per month on a $320,000 loan.

There are several ways to avoid or eliminate PMI. The most straightforward is putting 20% or more down at purchase. If that's not possible, you can request PMI removal once you've built 20% equity through payments or home appreciation (you may need an appraisal). By law, PMI is automatically cancelled when your loan-to-value ratio reaches 78% based on the original amortization schedule.

Some borrowers choose lender-paid PMI (LPMI), where the lender pays the premium in exchange for a slightly higher interest rate. This can make sense if you plan to keep the loan long-term. Another option is a piggyback loan (80-10-10), where you take a second mortgage for 10% to avoid PMI on the primary loan.

Closing Costs: What to Expect When Buying

Closing costs are the fees and expenses paid when finalizing a real estate transaction. They typically range from 2% to 5% of the home's purchase price. On a $400,000 home, expect to pay $8,000 to $20,000 in closing costs on top of your down payment.

Common closing costs include loan origination fees (0.5-1% of loan), appraisal ($300-$500), title insurance ($500-$1,500), attorney fees, recording fees, and prepaid items such as property taxes and homeowners insurance. Some costs are negotiable — you can shop around for title insurance and request that the seller contribute to closing costs.

While some buyers roll closing costs into the loan to reduce upfront cash needs, this increases the loan balance and total interest paid. If you have the cash available, paying closing costs separately keeps your loan smaller and reduces long-term costs. Use the closing costs input above to see how these fees affect your total cost of homeownership.

FAQ

How much house can I afford?
A common rule is the 28/36 rule: spend no more than 28% of gross income on housing (PITI) and no more than 36% on total debt. On a $100,000 salary, that means roughly $2,333/month for housing. Use this calculator with your actual numbers to see total monthly cost including taxes, insurance, and PMI.
What is PITI?
PITI stands for Principal, Interest, Taxes, and Insurance - the four components of a typical mortgage payment. Lenders evaluate your ability to pay based on the full PITI amount, not just principal and interest. This calculator breaks down each component so you see your true monthly housing cost.
How much down payment do I need?
Conventional loans require 5-20% down, FHA loans accept 3.5%, and VA/USDA loans may require 0% down. Putting less than 20% down typically requires PMI. A larger down payment reduces your loan amount, monthly payment, and total interest paid over the life of the loan.
What is PMI and when is it required?
Private Mortgage Insurance (PMI) is required when your down payment is less than 20% on a conventional loan. It typically costs 0.5-1% of the loan balance annually. PMI protects the lender (not you) and is automatically removed once your loan-to-value ratio reaches 78%, or you can request removal at 80%.
How do extra payments save money?
Extra payments go directly to principal, reducing the balance faster. This means less interest accrues each month. Even $200/month extra on a $320,000 loan at 6.5% can save over $80,000 in interest and pay off the mortgage 5+ years early. Use the extra payments section to see your specific savings.
What are closing costs?
Closing costs typically range from 2-5% of the home price and include origination fees, appraisal, title insurance, attorney fees, recording fees, and prepaid items (insurance and taxes). On a $400,000 home, expect $8,000-$20,000. Some costs are negotiable or can be rolled into the loan.
Fixed-rate vs adjustable-rate mortgage - which is better?
Fixed-rate mortgages offer payment stability - your rate never changes. ARMs (adjustable-rate mortgages) start lower but can increase after the initial period (typically 5 or 7 years). Fixed rates are better if you plan to stay long-term. ARMs can save money if you plan to move or refinance within the initial fixed period.
How does the interest rate affect my payment?
Each 1% increase in interest rate raises your monthly payment by roughly 10-12%. On a $320,000 loan over 30 years, the difference between 5.5% and 7.5% is about $450/month - over $162,000 in total interest. Use the rate scenarios section to see exactly how rate changes affect your payment.
Should I choose a 15-year or 30-year mortgage?
A 15-year mortgage has higher monthly payments but much lower total interest. On $320,000 at 6.5%, a 30-year costs $2,023/month (total interest $408,274) while a 15-year costs $2,789/month (total interest $182,069). Choose 15-year if you can afford 35-40% higher payments and want to save on interest.
What is LTV (Loan-to-Value)?
LTV is the ratio of your loan amount to the property value. With a $320,000 loan on a $400,000 home, your LTV is 80%. Lower LTV means less risk for lenders, which can result in better interest rates. LTV above 80% typically triggers PMI requirements on conventional loans.
How do biweekly payments work?
Instead of 12 monthly payments, you make 26 half-payments (equivalent to 13 full payments per year). This extra payment goes to principal and can shave 4-6 years off a 30-year mortgage. This calculator approximates biweekly savings by applying one extra annual payment.
Can I remove PMI early?
Yes. You can request PMI removal when your LTV reaches 80% (through payments or home appreciation). PMI is automatically cancelled at 78% LTV based on the original schedule. Making extra payments accelerates reaching 80% LTV. This calculator shows when PMI drops off based on your payment plan.
What credit score do I need for a mortgage?
Conventional loans typically require 620+, FHA loans accept 580+ (3.5% down) or 500+ (10% down). Higher scores (740+) get the best rates. A 100-point difference in score can mean 0.5-1% higher interest rate, adding tens of thousands in total cost over 30 years.
Should I pay points to lower my rate?
Mortgage points (each point = 1% of loan amount) buy down your rate by about 0.25%. On a $320,000 loan, one point costs $3,200 and saves about $50/month. Break-even is roughly 5 years. Points make sense if you plan to keep the loan long-term and have extra cash at closing.
How much are property taxes?
Property tax rates vary widely by location: 0.3% in Hawaii to over 2% in New Jersey and Illinois. The national average is about 1.1%. On a $400,000 home at 1.2%, annual property tax is $4,800 ($400/month). This is a significant ongoing cost that many first-time buyers underestimate.
What does homeowners insurance cover?
Standard homeowners insurance covers the dwelling, personal property, liability, and additional living expenses. Average annual cost is $1,200-$2,400 depending on location, home value, and coverage. Flood, earthquake, and hurricane coverage require separate policies. Lenders require insurance for the life of the loan.
What are HOA fees?
Homeowners Association fees cover shared amenities, maintenance, insurance for common areas, and sometimes utilities. Fees range from $100-$700+/month depending on amenities and location. HOA fees typically increase annually. Factor them into your total monthly housing cost as they never go away.
How does a one-time extra payment help?
A single lump sum payment (like a tax refund or bonus) applied to principal saves money by reducing the balance that accrues interest. A one-time $10,000 extra payment in year 1 of a $320,000 loan at 6.5% can save over $25,000 in interest and reduce the loan term by about 10 months.
What is amortization?
Amortization is the gradual repayment of a loan through scheduled payments. Early in a mortgage, most of each payment goes to interest. Over time, more goes to principal. On a 30-year mortgage at 6.5%, about 65% of the first payment is interest, but by year 20, about 65% goes to principal.
Can I refinance to a lower rate later?
Yes, refinancing replaces your current mortgage with a new one at a lower rate. A general rule: refinancing saves money if you can reduce your rate by at least 0.5-1% and plan to stay long enough to recoup closing costs (typically 2-4 years). Calculate your break-even point before refinancing.
What is the difference between pre-qualified and pre-approved?
Pre-qualification is an informal estimate based on self-reported information. Pre-approval involves credit checks, income verification, and provides a specific loan amount. Pre-approval carries more weight with sellers and gives you a realistic budget. Get pre-approved before house hunting.
How do I calculate my debt-to-income ratio?
Add all monthly debt payments (mortgage, car loans, student loans, credit cards) and divide by gross monthly income. For a mortgage, lenders want front-end DTI (housing only) under 28% and back-end DTI (all debt) under 36-43%. Example: $6,000 income with $2,100 in total debt = 35% DTI.
Is it worth paying off my mortgage early?
It depends on your interest rate vs. investment returns. If your mortgage rate is 6.5% and you expect 7-10% from investments, investing may win (especially after tax deductions). But mortgage payoff provides guaranteed savings and peace of mind. A balanced approach: make small extra payments while also investing.
What happens to my mortgage if I sell?
When you sell, the mortgage is paid off from sale proceeds. If your home sells for more than you owe, you keep the difference (minus selling costs of 5-6%). If you owe more than the sale price (underwater), you may need to bring cash to closing or negotiate a short sale with your lender.
How do property taxes change over time?
Property taxes generally increase over time as local governments reassess property values and adjust tax rates. Average annual increases are 2-4%. Some states cap annual increases (like California's Proposition 13). Budget for 2-3% annual property tax increases in your long-term housing plan.
What is escrow and why do I need it?
Escrow is an account where your lender collects monthly payments for property taxes and insurance, then pays these bills on your behalf. Most lenders require escrow for loans with less than 20% down. It ensures taxes and insurance stay current, protecting both you and the lender.
Can I deduct mortgage interest on my taxes?
Yes, mortgage interest on loans up to $750,000 (for homes purchased after Dec 2017) is tax-deductible if you itemize. Property taxes are also deductible up to a $10,000 SALT cap. However, the 2017 tax reform increased the standard deduction, so fewer homeowners benefit from itemizing.
How much should I budget for home maintenance?
The general rule is 1-2% of home value annually for maintenance and repairs. For a $400,000 home, budget $4,000-$8,000/year. Older homes may need more. Major expenses include roof (every 20-30 years), HVAC (every 15-20 years), and appliances. Build an emergency fund for unexpected repairs.
What is a mortgage rate lock?
A rate lock guarantees your interest rate for a specific period (usually 30-60 days) while your loan is processed. If rates rise during that time, your locked rate is protected. Rate locks may have fees, and extension fees apply if your closing is delayed. Lock when you're confident about the timeline.
How does home equity work?
Home equity = home value minus remaining mortgage balance. You build equity through mortgage payments (principal portion) and home appreciation. With 20% down on a $400,000 home, you start with $80,000 equity. You can access equity through HELOCs or cash-out refinancing, but this increases your debt.

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