What this calculator includes
Most mortgage calculators show you principal and interest, then stop. That number is typically 25 to 35 percent lower than what actually leaves your bank account each month, which is why so many first-time buyers are blindsided at closing.
This one adds the four costs that lenders bundle into your monthly payment: property tax, homeowners insurance, private mortgage insurance, and HOA dues. Together they make up what the industry calls PITI plus extras. Your lender collects tax and insurance into an escrow account and pays those bills on your behalf, so they arrive as one combined monthly figure.
How the payment is calculated
The principal and interest portion uses the standard amortization formula:
M = P × [ r(1+r)n ] / [ (1+r)n − 1 ]
- P is the loan amount, meaning home price minus down payment
- r is the monthly interest rate, so the annual rate divided by 12
- n is the total number of payments, so the term in years multiplied by 12
Property tax and insurance are simply annual figures divided by 12. PMI is calculated as a percentage of the loan balance and is only applied when your down payment is below 20 percent.
Why your down payment matters more than you think
Crossing the 20 percent threshold does two things at once. It shrinks the amount you borrow, and it removes private mortgage insurance entirely. On a $420,000 home, moving from a 10 percent down payment to 20 percent cuts the monthly payment by several hundred dollars, and roughly a third of that saving comes from dropping PMI alone.
If you are already paying PMI, you are not stuck with it forever. Under the Homeowners Protection Act, lenders must automatically cancel PMI once your loan balance reaches 78 percent of the original home value. You can usually request cancellation earlier, at 80 percent, though the lender may require an appraisal.
What this calculator does not cover
Closing costs are not included here. Budget roughly 2 to 5 percent of the purchase price for lender fees, title insurance, appraisal, and prepaid escrow. These are paid once, at closing, rather than monthly.
It also assumes a fixed rate for the full term. If you are considering an adjustable-rate mortgage, the payment shown applies only to the introductory period. And property tax is treated as a flat annual figure, whereas real assessments tend to rise over time.
Common questions
What interest rate should I enter?
Enter the rate you have actually been quoted. The default in the box is a national average and is only there so the calculator shows something sensible before you start typing. Rates vary meaningfully by credit score, loan type, and lender, so an average is a starting point rather than a prediction.
How much house can I afford?
A common guideline is that your total monthly housing payment should stay under 28 percent of gross monthly income, and all debt payments combined under 36 percent. Lenders vary, and some approve higher ratios, but the guideline exists because payments above it leave very little room for anything going wrong.
Is a 15-year mortgage better than a 30-year?
A 15-year loan carries a lower rate and dramatically less total interest, often less than half. The trade-off is a much higher monthly payment and less flexibility. Try both terms in the calculator above and compare the total interest figures. The gap is usually larger than people expect.
Does this store my information?
No. The calculation runs entirely in JavaScript inside your browser. Nothing is transmitted to a server, and nothing is saved when you close the tab.
This tool provides estimates for general information only and is not financial advice. Confirm all figures with your lender before making a decision.