🏠 Mortgage Calculator: Monthly Payment, PMI, Taxes and Interest
By ToolNimba Finance Team · Reviewed by ToolNimba Editorial Review, personal finance content · Updated 2026-06-20
This calculator gives an estimate only. Your actual mortgage cost depends on your lender fees, points, private mortgage insurance, escrow for taxes and insurance, the exact compounding convention, and whether the rate is fixed or adjustable. The result is not financial advice, confirm the final figures with your lender and speak to a qualified mortgage professional before borrowing.
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This mortgage calculator works out the monthly payment on a home loan and shows what the loan really costs once interest is added in. Enter the home price, your down payment, the annual interest rate, and the loan term in years. You will instantly see the monthly principal and interest payment, the loan amount, the total interest paid, and the full amount repaid over the term. You can also add annual property tax and home insurance to estimate the complete monthly housing cost.
What is the Mortgage Calculator?
A mortgage is a long-term loan used to buy property, repaid in equal monthly installments over a fixed term, most commonly 15 or 30 years. The amount you actually borrow is the loan principal, which equals the home price minus your down payment. A larger down payment means a smaller loan, a lower monthly payment, and far less interest over the life of the mortgage. It can also help you avoid private mortgage insurance, which lenders often require when the down payment is under 20 percent of the price.
The monthly principal and interest payment is found with the standard amortizing loan formula M = P times r times (1 + r) to the power n, divided by ((1 + r) to the power n minus 1). Here P is the loan amount, r is the monthly interest rate (the annual rate divided by 12 and by 100), and n is the number of monthly payments (years times 12). The payment is level for the whole term, so the lender solves for the exact figure that clears the balance to zero by the final month. This is why a small change in the rate or term can move the payment by a surprising amount.
Lenders and budgeting tools often describe the real monthly cost as PITI, which stands for principal, interest, taxes, and insurance. Principal and interest are set by the loan formula. Property taxes and homeowners insurance are added on top, usually collected through an escrow account so the lender can pay those bills on your behalf when they fall due. If your down payment is below 20 percent you will also normally pay private mortgage insurance, or PMI, until you build enough equity for it to be cancelled. Adding these items is the difference between a payment that looks affordable and one you can actually afford.
Inside each payment, the split between interest and principal shifts over time. In the early years most of the payment is interest because the outstanding balance is large, so only a small slice reduces what you owe. As the balance falls, the interest portion shrinks and more of each fixed payment goes to principal. This front-loading is why extra payments made early in a mortgage save much more interest than the same payments made near the end, and why an amortization schedule looks lopsided rather than evenly split.
Affordability is the other half of the picture. A common guideline is the 28/36 rule, which suggests keeping housing costs at or below 28 percent of your gross monthly income and total debt payments at or below 36 percent. Many lenders will stretch the back-end ratio to 43 percent for qualified borrowers, but staying nearer the lower end leaves room for repairs, rate changes, and life. Use the calculator alongside your real income and other debts so the monthly figure is one you can live with comfortably, not just one a lender will approve.
Finally, remember that the headline payment is not the only cost of buying. You will also pay closing costs of roughly 2 to 5 percent of the loan at the start, and ongoing costs such as maintenance, repairs, and any homeowners association dues that this calculator does not include. Treat the monthly payment as the core number, then layer these extras on top when you compare a mortgage to renting or weigh one home against another.
When to use it
- Estimating the monthly payment on a home before you make an offer or get pre-approved.
- Comparing a 15-year and a 30-year term to weigh a higher monthly payment against far lower total interest.
- Seeing how a bigger down payment lowers both the monthly payment and the lifetime interest cost.
- Budgeting the full PITI housing cost by adding property tax and home insurance to principal and interest.
- Checking whether a home fits the 28/36 affordability guideline against your gross monthly income.
- Testing how a higher or lower interest rate changes the payment when you shop multiple lenders.
How to use the Mortgage Calculator
- Enter the home price you are planning to pay.
- Enter your down payment, the loan amount is the price minus this figure.
- Enter the annual interest rate your lender is quoting.
- Enter the loan term in years, usually 15 or 30.
- Optionally add annual property tax and home insurance to see the full monthly cost.
- Read off the monthly payment, total interest, and total paid over the term.
Formula & method
Worked examples
A $300,000 home with no down payment, at 6% annual interest over 30 years (360 months).
- Loan amount P = 300,000 − 0 = 300,000
- Monthly rate r = 6 ÷ 12 ÷ 100 = 0.005
- (1 + r)ⁿ = 1.005^360 = 6.022575
- M = 300,000 × 0.005 × 6.022575 ÷ (6.022575 − 1)
- M = 9,033.86 ÷ 5.022575 = 1,798.65
- Total paid = 1,798.65 × 360 = 647,514.57
- Total interest = 647,514.57 − 300,000 = 347,514.57
Result: Monthly P+I ≈ $1,798.65 · Total interest ≈ $347,514.57 · Total paid ≈ $647,514.57
A $400,000 home with an $80,000 down payment, at 7% annual interest over 30 years.
- Loan amount P = 400,000 − 80,000 = 320,000
- Monthly rate r = 7 ÷ 12 ÷ 100 = 0.0058333
- (1 + r)ⁿ = 1.0058333^360 = 8.116497
- M = 320,000 × 0.0058333 × 8.116497 ÷ (8.116497 − 1)
- M = 15,150.80 ÷ 7.116497 = 2,128.97
- Total paid = 2,128.97 × 360 = 766,428.47
- Total interest = 766,428.47 − 320,000 = 446,428.47
Result: Monthly P+I ≈ $2,128.97 · Total interest ≈ $446,428.47 · Total paid ≈ $766,428.47
Estimating full PITI on the $320,000 loan above with $4,800 annual property tax and $1,800 annual home insurance.
- Principal and interest = $2,128.97 per month (from the example above)
- Monthly property tax = 4,800 ÷ 12 = 400.00
- Monthly home insurance = 1,800 ÷ 12 = 150.00
- Full monthly PITI = 2,128.97 + 400.00 + 150.00
Result: Full monthly housing cost ≈ $2,678.97 (P+I $2,128.97 plus $550 tax and insurance)
Monthly principal and interest on a $300,000 loan by rate and term
| Rate | 30-year monthly | 30-year total interest | 15-year monthly |
|---|---|---|---|
| 5% | $1,610.46 | $279,767.35 | $2,372.38 |
| 6% | $1,798.65 | $347,514.57 | $2,531.57 |
| 7% | $1,995.91 | $418,526.69 | $2,696.48 |
| 8% | $2,201.29 | $492,465.74 | $2,866.96 |
How the down payment changes a loan on a $400,000 home at 6% over 30 years
| Down payment | Loan amount | Monthly P+I | Total interest |
|---|---|---|---|
| $0 (0%) | $400,000 | $2,398.20 | $463,352.76 |
| $40,000 (10%) | $360,000 | $2,158.38 | $417,017.48 |
| $80,000 (20%) | $320,000 | $1,918.56 | $370,682.20 |
| $120,000 (30%) | $280,000 | $1,678.74 | $324,346.93 |
The 28/36 affordability guideline by gross monthly income
| Gross monthly income | Max housing (28%) | Max total debt (36%) |
|---|---|---|
| $4,000 | $1,120 | $1,440 |
| $6,000 | $1,680 | $2,160 |
| $8,000 | $2,240 | $2,880 |
| $10,000 | $2,800 | $3,600 |
Common mistakes to avoid
- Budgeting only for principal and interest. The monthly P+I is not your full housing cost. Property tax, home insurance, and private mortgage insurance are usually collected on top, often through escrow, and can add hundreds of dollars a month. Add tax and insurance here for a more realistic PITI figure.
- Choosing a 30-year term purely for the lower payment. A 30-year loan has a smaller monthly payment than a 15-year loan, but you pay interest for twice as long, so the total interest is far higher. On a $300,000 loan at 6%, the 30-year option costs more than double the interest of the 15-year option.
- Underestimating the value of a bigger down payment. Putting more down shrinks the loan, lowers the monthly payment, and cuts lifetime interest. Reaching 20 percent down also commonly removes the requirement for private mortgage insurance, saving more each month.
- Forgetting closing costs and cash reserves. Closing costs typically run 2 to 5 percent of the loan amount and are due upfront, separate from the down payment. Budgeting only for the monthly payment can leave you short of cash to actually close on the home.
- Assuming an adjustable rate stays fixed. This calculator uses a single fixed rate. If you have an adjustable-rate mortgage, the payment can rise or fall when the rate resets, so treat the result as a snapshot at today rate only.
- Ignoring the 28/36 affordability limits. A payment a lender will approve is not always one you can comfortably carry. Keeping housing near 28 percent of gross income and total debt near 36 percent leaves room for repairs, rate changes, and saving.
Glossary
- Principal
- The loan amount you actually borrow, equal to the home price minus your down payment.
- Down payment
- The cash you pay upfront toward the home price, reducing the amount you need to finance.
- Interest rate
- The annual cost of borrowing, expressed as a percentage. Divided by 12 it gives the monthly rate used in the formula.
- Term
- The length of the mortgage in years, most often 15 or 30, which sets the number of monthly payments.
- Amortization
- The schedule that splits each level payment into interest and principal and brings the balance down to zero.
- PITI
- Principal, interest, taxes, and insurance, the four parts that make up a full monthly mortgage payment.
- Escrow
- An account the lender uses to collect and pay your property tax and insurance alongside the loan payment.
- PMI
- Private mortgage insurance, a charge lenders often require when the down payment is below 20 percent of the price.
- Loan-to-value (LTV)
- The loan amount as a percentage of the home value. A lower LTV usually means better terms and no PMI.
- Closing costs
- Upfront fees to finalize the loan, often 2 to 5 percent of the loan amount, paid separately from the down payment.
Frequently asked questions
How is a monthly mortgage payment calculated?
The principal and interest payment uses the amortizing formula M = P·r·(1+r)ⁿ ÷ ((1+r)ⁿ − 1), where P is the loan amount, r is the monthly rate (annual rate ÷ 12 ÷ 100), and n is the number of months (years × 12). The calculator applies it automatically and can add monthly property tax and insurance on top.
What is the monthly payment on a $300,000 mortgage at 6% over 30 years?
The principal and interest payment is about $1,798.65 per month. Over the full 30 years you would pay roughly $347,514.57 in interest, for a total of about $647,514.57. Property tax and insurance, if applicable, are extra.
What does PITI mean on a mortgage?
PITI stands for principal, interest, taxes, and insurance, the four parts of a full monthly mortgage payment. Principal and interest pay down the loan, while property taxes and homeowners insurance are usually collected through an escrow account and added on top. Add tax and insurance in this calculator to see your PITI estimate.
Should I choose a 15-year or 30-year mortgage?
A 15-year loan has higher monthly payments but a lower rate and far less total interest, so you build equity faster and pay less overall. A 30-year loan lowers the monthly payment, which helps cash flow, but you pay interest much longer. The right choice depends on what payment fits your budget comfortably.
Does my down payment affect the monthly payment?
Yes. The loan amount is the price minus the down payment, so a larger down payment means a smaller loan, a lower monthly payment, and less interest over the term. Reaching 20 percent down also commonly removes private mortgage insurance.
When do I have to pay PMI and how do I get rid of it?
Lenders usually require private mortgage insurance when your down payment is under 20 percent of the price. As you pay down the loan and the balance falls to about 80 percent of the original value you can typically request cancellation, and it is generally removed automatically at 78 percent. Rising home values or extra payments can get you there sooner.
How much house can I afford?
A common guideline is the 28/36 rule: keep housing costs at or below 28 percent of your gross monthly income and total debt payments at or below 36 percent. On a $6,000 monthly income that is roughly $1,680 for housing and $2,160 for all debt. Many lenders will stretch the total to 43 percent, but staying lower leaves more breathing room.
Does this calculator include property tax and insurance?
The core result is the principal and interest payment. You can enter annual property tax and home insurance in the optional fields, and the calculator adds the monthly share to show your fuller PITI housing cost. It does not include HOA dues or maintenance.
Can paying extra reduce the total interest?
Yes. Because interest is charged on the outstanding balance, any extra paid toward principal reduces that balance and the interest charged from then on. Extra payments early in the loan save the most, since that is when the balance is largest. Check whether your lender allows penalty-free prepayment.
What is the difference between a fixed-rate and adjustable-rate mortgage?
A fixed-rate mortgage keeps the same interest rate and principal and interest payment for the whole term, so the figure here stays steady. An adjustable-rate mortgage starts with a fixed period, then the rate and payment can move up or down at set intervals. This calculator models a fixed rate, so for an ARM treat the result as the starting payment only.
Sources
- How much can I borrow and what will it cost? , U.S. Consumer Financial Protection Bureau
- Mortgage , Investopedia