Mortgage Calculator

What the Mortgage Calculator does

A mortgage payment is more than principal and interest. Property tax, home insurance and HOA dues are usually collected alongside it, and together they make up what lenders call PITI. This calculator shows all of it.

Formula

• Loan amount = Price − Down payment
• P&I = L × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1)
• Total monthly = P&I + tax/12 + insurance/12 + HOA

Inputs explained

How to use it

1. Choose Currency.
2. Enter Home price, Annual interest rate and Loan term.
3. Optionally add Down payment, Annual property tax and Annual home insurance.
4. Select Calculate.

Worked example

A $400,000 home, 20% down, 30 years at 6.5%, $4,800 tax and $1,500 insurance a year.

Price

400000

Down

80000

Rate

6.5

Term

30

Tax

4800

Insurance

1500

P&I $2,022.62 plus $525 escrow = $2,547.62 a month.

Reading the result

• The monthly figure is principal and interest plus whichever taxes, insurance and fees you entered. Lenders assess affordability on this full figure, not on principal and interest alone.
• Early payments are mostly interest. On a 30-year loan the split does not reach half principal until roughly the 15th year, which is why overpaying early saves disproportionately.
• Total interest over the term is the number worth comparing between offers. A lower monthly payment achieved by lengthening the term usually costs more overall.

Assumptions and limitations

• The rate is treated as fixed for the whole term. A variable or tracker rate will diverge from this schedule as soon as it moves.
• Property tax and insurance are assumed constant, though both typically rise with time and with property value.
• The schedule assumes every payment is made in full and on time, with no overpayments, payment holidays or refinancing.

Common mistakes

• Entering the annual interest rate where a monthly rate is expected, or the reverse — a factor-of-12 error that looks plausible at a glance.
• Budgeting on principal and interest alone, then being surprised by escrow. Taxes and insurance frequently add 20-30% to the payment.
• Comparing offers on monthly payment rather than on rate, term and total cost together.

Frequently asked questions

What is PMI and how do I avoid it?

Private mortgage insurance protects the lender when your down payment is under 20%. Put 20% down, or pay the loan below 80% LTV and request cancellation.

How much house can I afford?

A common guide is keeping total housing costs under 28% of gross income and all debt under 36%. The affordability calculator applies both tests.

What is escrow, and why did my payment change on a fixed rate?

Lenders collect property tax and insurance monthly into an escrow account and pay the bills on your behalf. When the tax assessment or the premium changes, the escrow portion is recalculated, so the total payment moves even though the interest rate has not.

Are discount points worth paying?

A point costs 1% of the loan and buys a lower rate. It pays off only if you keep the mortgage past the break-even point, which is the upfront cost divided by the monthly saving. Moving or refinancing before then loses money.

Method and sources

Method. Principal and interest use the standard amortizing-loan formula. Property tax, insurance and HOA are added at their monthly equivalent — the PITI convention lenders themselves use to state a full housing payment, not a simplification of it.

Limitations

• No lender rate table, escrow rule or PMI schedule is used — the loan-to-value threshold shown (80%) is the commonly cited figure, and your actual lender may set it differently.
• Property tax and insurance are entered as flat annual figures; both typically rise over time and neither is projected forward.

Related calculators

• Home Loan Calculator
• Mortgage Affordability Calculator
• Down Payment Calculator
• Rent vs Buy Calculator