How this mortgage calculator works
Enter the home price, your down payment, the interest rate and the loan term. The calculator works out the principal and interest payment, then adds monthly property tax, home insurance, PMI and HOA dues to show the full amount you would pay each month.
The mortgage payment formula
The principal and interest payment on a fixed-rate loan is:
M = P × r × (1 + r)n ÷ ((1 + r)n − 1)
- P is the loan amount (home price minus down payment).
- r is the monthly interest rate (yearly rate divided by 12).
- n is the number of monthly payments (360 for a 30-year loan).
Worked example
A $400,000 home with 20% down leaves a $320,000 loan. At 6.5% over 30 years, principal and interest come to $2,023 a month. Over the full term you would pay about $408,000 in interest. The same loan over 15 years costs $2,788 a month but only about $182,000 in interest.
| Term | Monthly principal and interest | Total interest |
|---|---|---|
| 30 years | $2,023 | $408,142 |
| 15 years | $2,788 | $181,758 |
What is included in a monthly mortgage payment
Lenders call the full payment PITI: principal, interest, taxes and insurance. If your down payment is under 20% on a conventional loan, private mortgage insurance is added. HOA dues are paid separately but count toward what you can afford.
How to use this calculator
Start with the home price and your down payment, then enter the interest rate from a lender quote and the loan term. Add property tax, home insurance, PMI and HOA dues if they apply to the home. Change one input at a time to see how much each one moves the monthly payment.
More examples: the same loan at three rates
This table uses the $320,000 loan from the worked example over 30 years. The rates are examples, not quotes.
| Interest rate | Monthly principal and interest | Total interest |
|---|---|---|
| 6.0% | $1,919 | $370,682 |
| 6.5% | $2,023 | $408,142 |
| 7.0% | $2,129 | $446,428 |
On this loan, each half point of rate adds about $105 a month and between $37,000 and $39,000 of interest over 30 years.
Adding taxes and insurance
Suppose property tax on the $400,000 home is $3,600 a year and home insurance is $2,400 a year. That adds $300 and $200 a month. Together with the $2,023 of principal and interest, the full monthly payment is about $2,523.
With 10% down instead of 20%, the loan is $360,000 and principal and interest rise to $2,275. PMI at an example rate of 0.6% a year adds another $180 a month.
What changes the result
- Interest rate: a higher rate raises both the monthly payment and the total interest, as the table above shows.
- Loan term: a shorter term raises the monthly payment but cuts total interest sharply.
- Down payment: more cash down means a smaller loan, and 20% down removes PMI on a conventional loan.
- Taxes and insurance: these depend on the location and the home, and they can change from year to year even when the loan rate is fixed.
Common mistakes
- Comparing homes on principal and interest alone and leaving out tax, insurance and HOA dues.
- Entering the APR instead of the interest rate.
- Forgetting PMI when the down payment is under 20% on a conventional loan.
- Putting every dollar into the down payment and keeping nothing for closing costs, which commonly run 2% to 5% of the loan.
- Reading the result as a loan offer. It is an estimate, and your lender sets the final numbers.
Related calculators
See how each payment splits between interest and principal with the amortization calculator. Plan the cash you need up front with the down payment calculator and the closing cost calculator.
Frequently asked questions
How much house can I afford?
A common lender guideline is that housing costs stay at or below 28% of gross monthly income and all debts at or below 36%. Use the home affordability calculator for your own numbers.
When does PMI stop?
On a conventional loan you can ask your lender to remove PMI once the balance reaches 80% of the home’s original value. It ends automatically at 78%.
Does a bigger down payment lower the payment?
Yes. Every extra dollar down reduces the loan, and reaching 20% down removes PMI on a conventional loan.
Is the interest rate the same as the APR?
No. The APR includes lender fees and points, so it is usually higher than the interest rate. This calculator uses the interest rate.
Is a 15-year or a 30-year mortgage better?
It depends on your budget. In the example above, the 15-year loan costs $765 more each month than the 30-year loan and saves about $226,000 in interest. Choose the shorter term only if the higher payment still leaves room for savings and other bills.
How much does PMI add to the payment?
PMI commonly costs about 0.3% to 1.5% of the loan per year, paid monthly. Your credit score and down payment decide where you fall in that range. Estimate it with the PMI calculator.
Can the payment on a fixed-rate mortgage change?
The principal and interest part stays the same for the whole term. The full payment can still move, because property tax, home insurance and HOA dues can change.
Is the result from this mortgage calculator a loan quote?
No. It is an estimate based on the numbers you enter. Newly Property is not a lender, so ask a lender for a quote before you make an offer.