Mortgage Payment Calculator

How it works

A mortgage payment has four parts, often called PITI: principal, interest, property tax, and insurance. This mortgage calculator splits all four, so a borrower sees the total monthly cost, not just the loan repayment.

The loan amount, the interest rate, and the term set your principal and interest. The standard amortized payment formula ties them together, and the calculator adds the yearly tax and insurance bills on top:

• L — the loan amount (home price minus down payment)
• i — the monthly interest rate (APR ÷ 12)
• n — the number of monthly payments (years × 12)

The amortization schedule then divides every payment. Early on, most of the money goes to interest, because interest is charged on the whole balance.

That balance falls slowly at first. Year by year the principal share takes over, and home equity in the property grows fastest near the end of the term.

With the defaults above, a $400,000 home with $80,000 down is a $320,000 loan. At 7% over 30 years, principal and interest come to about $2,129 a month.

Adding the yearly tax and insurance brings the true payment to roughly $2,654. Over the full term you would pay around $446,000 in interest alone, more than the $320,000 you actually borrowed.

What would half a point off that rate do to the total?

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How to use this calculator

1. Enter the home price and your down payment, and the calculator sets the loan amount from the difference.
2. Add the interest rate a lender has quoted you, then the term in years, usually 15 or 30.
3. Fill in the yearly property tax from the county record and a real home insurance quote for that address.
4. Read the PITI total, then check the split between principal, interest, tax, and insurance.
5. Change one input at a time, such as a bigger down payment or a lower rate, and compare the new payment.

A worked example: a $350,000 home at 6.5%

Say you are buying a $350,000 home with $35,000 down, a 10% down payment, and a lender quotes 6.5% on a 30-year fixed. You are financing $315,000. Principal and interest come to $1,991 a month.

Add property tax at 1.1% of the home's value, about $321 a month, and $1,400 a year of homeowners insurance, another $117, and the real monthly cost is $2,429.

The number that surprises most first-time buyers is the lifetime interest: keep that loan for the full 30 years and you pay about $401,765 in interest, more than the original loan itself. That is not a trick, it is just what 360 months of compounding at 6.5% costs.

Now run the same purchase as a 15-year loan. The payment jumps to $3,181 a month, about $752 more, but lifetime interest collapses to $178,918. The shorter term costs $752 a month and saves roughly $222,800 over the life of the loan.

That single comparison, your budget versus that saving, is the real decision this calculator helps you make. Try both terms with your own numbers above and watch the interest line, not just the payment.

What moves a mortgage payment the most?

Four numbers set the payment, and they do not matter equally. Home buyers who know which one counts most can put their effort where it changes the figure.

• The term shapes the total cost most, so weigh a 15-year against a 30-year before you commit to either loan.
• Even half a point on the interest rate adds tens of thousands of dollars over 30 years, so collect quotes from several lenders.
• A larger down payment shrinks the loan, and past 20% of the price it drops private mortgage insurance (PMI) from the payment.
• The price of the property gets less attention than it deserves. A cheaper home shrinks the loan, the tax on the property, and the interest at once.

Quotes expire, so ask each lender about a rate lock. That lock holds the quoted rate while the loan closes.

Compare the Annual Percentage Rate across quotes too, since it folds the loan origination fee into one figure. Several mortgage applications inside a short window count as one credit inquiry.

Credit matters on its own. A borrower with a strong credit score is quoted a lower rate, which trims the cost of the mortgage without changing the house.

Discount points do the same job. That upfront fee paid to the lender buys the rate down, so the payment fits your monthly budget. This mortgage calculator updates instantly, so test each input and see the cost change.

What the payment does and does not cover

The PITI figure here is what most lenders collect each month. A bank usually holds the property tax and home insurance portions in an escrow account and pays both bills for you.

That account still does not cover everything an owner pays.

• Condominiums and any property under a homeowner association add monthly dues that the mortgage payment does not include.
• PMI applies when you put less than 20% down, and that mortgage insurance protects the lender, not the borrower.
• Maintenance runs about 1% of the property's value a year, a cost you never see until the roof or water heater fails.
• Utilities and routine expenses like trash, water, and pest control never reach the mortgage statement either.

Your insurance policy covers the structure and your liability if someone is hurt on the property. It does not pay for upkeep, and floods usually need separate flood insurance.

Property taxes vary widely by ZIP code, because each county taxes the assessed value, not the purchase price. Those taxes fund local schools, roads, and other infrastructure.

Add those expenses to PITI and you have the true monthly cost of ownership. That total often runs 10 to 20% above the mortgage payment, well above the rental price of a similar home.

One cost does come back. Mortgage interest and the tax on the property can be claimed as a tax deduction, but only if you itemize.

Most home buyers in the United States take the standard deduction instead. Treat that tax deduction as a possible discount, not a certainty.

Where do the tax and insurance numbers come from?

This calculator asks for the yearly property tax and home insurance, and both numbers are easy to find. Zillow and Realtor.com publish the tax history for nearly every property, pulled from county records.

Use the most recent real bill instead of guessing a percentage.

One caution applies to that history. In many states the assessed value resets when a property sells, so the seller's old bill can understate what the buyer will owe.

The county assessor's site shows how the next assessment will be set. Assessments in many counties have followed the price increases that came after the COVID-19 pandemic. Check the trend, not just the latest bill.

• Real estate sites print an estimated payment on each listing, built from a national average interest rate and an assumed down payment.
• Those estimates often leave out PMI, homeowner association dues, and local pricing, so they tend to run low.
• Insurance premiums vary by ZIP code with the age of the roof and the property's distance from fire protection.

The pricing tools on those sites are models, not an appraisal, and no lender approves a loan from one. Insurers also charge more when a property is a rental than when the owner lives in it.

Insurance is the number worth quoting directly. An agent can price a specific address in minutes, and that quote belongs in the home insurance field here.

Rate tables on the same real estate sites show what banks advertise today. Those rates are a realistic starting point before formal quotes and an appraisal arrive.

What makes mortgage rates rise and fall?

Fixed-rate mortgages keep principal and interest level for the whole loan, so the interest rate you lock today never moves. What changes is the price banks charge on new loans.

That price follows the bond market, where investors buy mortgage backed securities and decide what each loan is worth. Rates can shift within days as those bonds trade.

The Federal Reserve influences that market indirectly. Its rate-setting committee, the FOMC, moves the federal funds rate to cool or support the economy. Inflation is the main thing that committee watches.

A higher federal funds rate does not touch a fixed loan already in place. It raises what a bank pays for short-term money, and mortgage rates on new loans usually follow.

An adjustable-rate mortgage reacts far faster, because its rate is tied to a benchmark that resets on a schedule. When rates climb, the payment climbs with them.

• During the COVID-19 pandemic the Federal Reserve bought mortgage backed securities in bulk, a program called quantitative easing, and mortgage rates fell sharply.
• The COVID-19 lockdowns that emptied offices also pushed buyers out of rental apartments and toward larger homes, and that demand lifted prices.
• The 2008 financial crisis worked the other way, since the foreclosures that followed left banks far more careful about who they approve.
• Freddie Mac surveys lenders and publishes an average rate each week, which is the figure most news reports quote.

That crash became the Great Recession, the deepest downturn in the United States since the Great Depression. Rules written after the recession still shape lending today.

The FHFA now oversees Freddie Mac and sets the limit on a conforming loan. The Financial Stability Oversight Council watches the wider system for the same kind of risk.

None of this changes an existing fixed loan. It only changes what refinancing might offer later, once inflation and the federal funds rate settle.

What do lenders check before approving a borrower?

The payment you can afford and the loan a lender will approve are different numbers. Before a purchase contract closes, the lender underwrites both the borrower and the property.

The CFPB's Owning a home guide walks through the whole process.

• Your credit score and credit history set the rate tier, and a damaged report costs real money over 30 years.
• The debt-to-income ratio weighs monthly debt, including any credit card balance at American Express or Capital One, against gross income.
• An appraisal confirms the price, and the loan-to-value figure decides whether PMI applies.
• Federal Housing Administration (FHA) loans, VA loans, and USDA loans accept smaller down payments than a conventional mortgage.

Know your loan-to-value figure before applying. Putting 20% down avoids PMI, but FHA loans close with far less.

Lenders count the full PITI inside the debt-to-income ratio, plus any homeowner association dues. Rental income from another property counts only with a documented history, and banks discount that income before adding it.

A high debt-to-income ratio blocks more applications than credit does. Paying off a car loan, a student loan, or a card balance first can matter more than a bigger down payment.

Wire fraud is worth one more precaution. Before wiring a down payment, call the bank on a number you already have. The FBI investigates closing fraud, and that money rarely comes back.

First-time home buyers can use free help too. The CFPB answers common questions, and HUD's Buying a home pages point to approved counselors.

How do you pay the mortgage off faster?

Interest builds on the outstanding balance, so every extra dollar goes straight to principal. That dollar erases future interest and shortens the payoff.

• Adding even $100 or $200 a month cuts years off a 30-year loan, and the extra payment math shows how many.
• Paying half the amount every two weeks makes 13 full payments a year, which is how a biweekly schedule pays the loan down faster.
• A lump sum, or a recast where the lender re-amortizes the loan, lowers the payment at the same interest rate.

Before sending extra money, confirm it lands on principal and that the loan carries no prepayment penalty. Ask the lender directly, since that penalty is not always spelled out in the payment summary.

Opportunity costs deserve a look too. Cash in a high-yield savings account or a money market fund can earn more than the mortgage rate saves.

Savings account rates move with the market, so compare the yield against your mortgage rate first.

Clearing high-interest credit card debt, or filling a thin emergency fund, usually beats prepaying a mortgage. Keep a month of expenses in a savings account first, then decide.

Refinancing, second mortgages, and home equity

Every payment builds home equity, the share of the property's value you own outright. Owners turn that equity into cash three main ways, each a different debt secured by the house.

Refinancing replaces the whole loan, usually to cut the interest rate or shorten the term. It carries closing costs, an appraisal, and a loan origination fee.

Those costs are why the refinance break-even point decides whether refinancing pays. It also starts the term over, so a borrower ten years in who refinances into a fresh 30-year loan restarts amortization.

Home equity loans and a HELOC are second mortgages that rank behind the first loan. Home equity loans hand over one lump sum at a fixed rate.

A HELOC is a revolving line of credit you draw on as costs come up. That borrowing works more like a credit card than a term loan. Cash-out refinancing rolls the debt into a brand new first mortgage instead.

All three turn equity into money, and all three pledge the property if the loan goes into default. Measure the equity you hold before borrowing against it.

Rates on a second mortgage run higher than on the first, and a HELOC usually floats with the market. Even so, second mortgages are how most owners fund a renovation without selling.

What happens if a payment is missed?

One late payment triggers fees and, after 30 days, a mark on your credit. Several missed payments put the loan into default, which can end in foreclosure, where the lender takes the property.

The way out is speed. Call the bank before you miss a payment, not after, and ask about forbearance or a repayment plan that fits your budget.

Most lenders would rather adjust a schedule than seize a house, and a housing counselor can negotiate on your behalf, often for free.

Going bankrupt is a separate process, and it does not automatically clear a mortgage secured by the property.