Mortgage Calculator
Calculate your monthly mortgage payment including principal, interest, taxes, and insurance. Free mortgage payment estimator.
Monthly Payment
$0.00
How the Mortgage Calculator Works
Enter the home price, down payment, interest rate, and loan term. The calculator breaks down your payment into principal & interest, property tax, and insurance (PITI).
Down Payment & PMI
If your down payment is less than 20% of the home price, most lenders require Private Mortgage Insurance (PMI), typically 0.5%โ1.5% of the loan per year.
Frequently Asked Questions
- Monthly mortgage payment (P&I) = Loan amount ร [r(1+r)โฟ] / [(1+r)โฟ โ 1], where r = monthly interest rate and n = number of payments. For a $320,000 loan at 6.5% for 30 years, the monthly P&I is $2,023. Add property tax and insurance for your full PITI payment.
- A common rule is the 28/36 rule: your monthly mortgage payment should not exceed 28% of your gross monthly income, and total debt payments should not exceed 36%. If you earn $6,000/month, max mortgage payment = $1,680. Lenders also look at your credit score, down payment, and debt-to-income ratio.
- Private Mortgage Insurance (PMI) is required when your down payment is less than 20% of the home price. It typically costs 0.5%โ1.5% of the loan per year. To avoid PMI: put down 20% or more, use a piggyback loan (80-10-10), or choose a lender-paid PMI option (usually at a higher interest rate).
- DTI = Total monthly debt payments รท Gross monthly income ร 100. Most lenders require a DTI below 43%. Include all debts: car loans, student loans, credit cards, and the new mortgage payment. Example: $2,000 debts รท $6,000 income = 33.3% DTI.
- A 15-year mortgage has higher monthly payments but you pay far less interest overall and build equity faster. A 30-year mortgage has lower monthly payments, offering more flexibility. On a $300,000 loan at 6.5%: 30yr = $1,896/mo ($382,560 interest); 15yr = $2,613/mo ($170,340 interest) โ you save over $212,000.
- Home equity = Current market value โ Remaining mortgage balance. Include this in your net worth: Net worth = Total assets (home equity + savings + investments) โ Total liabilities (remaining debts). As you pay down your mortgage, your equity and net worth grow.
- A larger down payment: lowers your monthly payment, reduces total interest paid, eliminates or reduces PMI, and gives you instant equity. Each extra 1% down on a $400,000 home ($4,000) saves roughly $7โ10 in monthly payments and thousands over the life of the loan.
- Add extra principal payments each month. Even $100โ$200 extra per month on a 30-year mortgage can cut 4โ7 years off the loan and save tens of thousands in interest. Use a mortgage payoff calculator to see the exact impact of additional payments.
- Refinancing means replacing your current mortgage with a new one โ usually to get a lower interest rate, reduce the term, or cash out equity. It typically makes financial sense if you can lower your rate by at least 0.5โ1% and plan to stay in the home long enough to recoup closing costs (usually 2โ3 years).
- Your credit score directly determines your interest rate. On a $300,000 30-year mortgage: a 760+ score might get 6.5% (~$1,896/mo); a 680 score might get 7.2% (~$2,036/mo). That 0.7% difference costs an extra $50,400 over 30 years. Improving your score before applying can save significant money.