Mortgage Calculator
Full monthly cost of a home loan — principal, interest, taxes, insurance, and PMI — with an amortization view.
Estimates only. Actual rates depend on credit score, debt-to-income, property location, and lender. Property tax and insurance vary widely by region. See methodology.
What this calculator does
It estimates the full monthly cost of owning a home with a mortgage — not just the loan payment. The result is what lenders call PITI plus extras: principal, interest, property taxes, homeowners insurance, plus PMI and HOA when those apply. The chart shows how the loan balance shrinks and how much total interest you pay along the way.
Why the monthly payment is only half the story
Buyers usually focus on the principal-and-interest payment because it’s the headline number on every loan estimate. But for a typical American home, taxes and insurance add 15–30% to the monthly cost. On a $350,000 home with 20% down at 6.75% for 30 years, the loan payment is roughly $1,815/month. Add $320 in property tax (at 1.1%), $125 in insurance, and you’re actually paying $2,260 — about 25% more than the loan-only number suggests.
That’s before HOA dues, which can add another $100–500/month in condominium and planned-community settings, and before PMI if you put less than 20% down. Showing the full picture is the point of this calculator.
How amortization actually works
Every monthly payment is split between interest (cost of borrowing) and principal (paying down what you owe). The split is calculated on the remaining balance each month. Because the balance is large early on, most of your early payments go to interest. As the balance falls, the interest portion shrinks and the principal portion grows.
On a 30-year mortgage at 6.75%, the “crossover point” — where each payment is finally more principal than interest — happens around month 200, or roughly year 17. That’s why the early years feel like running in place: you are making large payments and seeing tiny balance reductions. The chart in this calculator shows that visually — the cumulative-interest area grows quickly while the loan balance line drops slowly at first.
15-year vs 30-year: the real tradeoff
Switching from a 30-year to a 15-year loan typically increases the monthly payment by 35–45% but cuts total interest by roughly 60%. On the same $280,000 loan at 6.75%: 30 years costs $1,815/month and $373,000 in lifetime interest. 15 years costs $2,478/month and $166,000 in lifetime interest. The 15-year saves about $207,000.
The catch is cash flow. If the higher payment forces you to underfund retirement or carry an unstable emergency reserve, the “savings” on paper is a real liquidity risk in life. A common compromise: take the 30-year for safety, then make extra principal payments when you can. That gets most of the savings without locking you into the higher mandatory payment.
Property taxes and insurance — what to actually budget
Property tax rates vary enormously by state. New Jersey, Illinois, and New Hampshire average above 2% of home value annually. Hawaii, Alabama, and Colorado are below 0.5%. Within a state, county and municipal rates vary further. Look up the actual property tax history of any home you’re seriously considering — sites like Zillow and Redfin display recent tax bills, and the county assessor publishes them publicly.
Homeowners insurance has gotten more expensive almost everywhere since 2020. Coastal Florida, wildfire-prone California zones, and tornado-belt states see annual premiums of $3,000–$8,000. Get a real quote from one or two insurers before closing — your loan estimate will use a placeholder that may understate the actual cost. Flood insurance is separate and is required in FEMA-designated flood zones.
Why a mortgage is different from rent
Rent is a simple monthly cost — you pay it, you live there, end of story. A mortgage is more complicated. Part of every payment buys equity (a piece of the home you actually own), and part is interest (rent paid to the bank for borrowing the money). Plus you owe taxes, insurance, repairs, and sometimes HOA dues that a landlord would normally cover.
The math gets interesting because that equity portion compounds. After 5 years on a 30-year loan, you might only own 10–15% of the home. After 20 years, it’s roughly 60%. After 30, it’s yours free and clear. Renting forever doesn’t build that equity, but it also avoids the cost of a roof replacement, a furnace going out, and the closing costs of buying and selling.
What this calculator does not include
Closing costs. Buying a home typically costs 2–5% of the purchase price in closing costs (loan origination, title insurance, appraisal, recording fees, prepaid taxes and insurance). On a $350,000 home, that’s $7,000–$17,500 due at signing — on top of the down payment.
Maintenance. Plan on 1–3% of home value per year over time for maintenance, repairs, and replacements. New homes are cheaper near term and more expensive long term as systems age.
Escrow buffer. Most lenders require an escrow cushion (usually 2 months of taxes and insurance) at closing, which inflates upfront cash needs.
Mortgage rate variability. Quoted rates change daily. The rate you see today may not be the rate you actually lock. A small change — 0.25% — can shift your monthly payment by $50–$100 on a typical loan.
Related calculators
- Refinance calculator — if you already have a mortgage, see whether refinancing makes sense.
- Compound interest visualizer — what would the same monthly payment grow to if invested instead?
- First-car calculator — the loan math here applies to auto loans too.
Frequently asked questions
How is the monthly mortgage payment actually calculated?
The principal-and-interest portion uses the standard amortization formula: M = P × r(1+r)ⁿ / [(1+r)ⁿ − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments. Property tax, homeowners insurance, PMI, and HOA dues are added on top to produce the full monthly payment (PITI plus extras). This calculator computes each piece separately so you can see where every dollar goes.
What’s the difference between a 15-year and a 30-year mortgage?
A 30-year loan has lower monthly payments but you pay much more total interest — often roughly twice as much over the life of the loan. A 15-year loan costs more per month but builds equity faster and saves tens or hundreds of thousands in interest. On a $300,000 loan at 6.75%, a 30-year payment is about $1,946/month with $400,000 in lifetime interest. A 15-year payment is about $2,655/month with $178,000 in interest. The 15-year saves roughly $222,000.
When do I have to pay PMI?
Private mortgage insurance is required by most lenders when your down payment is less than 20% of the home price on a conventional loan. PMI typically costs 0.3–1.5% of the loan amount per year, depending on your credit score and loan-to-value ratio. It does not benefit you — it protects the lender. Once you reach 20% equity (through payments or appreciation), you can request PMI removal. At 22% equity, the lender is required to drop it automatically.
Why does so much of my early payment go to interest?
Interest is calculated each month on the remaining balance. In year 1, you owe almost the full loan amount, so most of your payment goes to interest and only a sliver to principal. As the balance shrinks, more of each payment chips at principal. This is called amortization. On a 30-year loan, you typically don’t reach the crossover point (more principal than interest) until around year 12–18, depending on your rate.
How much house can I afford?
Lenders use two ratios. The front-end (housing) ratio caps total monthly housing cost at 28% of gross monthly income. The back-end (debt) ratio caps all debt payments combined at 36–43%. So a household earning $90,000/year has a target housing budget of about $2,100/month all-in (PITI + HOA). That’s a planning ceiling, not a goal — buying at the maximum tightens every other part of your budget for decades.
What’s included in property taxes and insurance?
Property tax is set by your county or municipality and is typically 0.5–2.5% of assessed home value annually, varying widely by state. Homeowners insurance covers structure, contents, and liability — expect $1,000–3,000/year for a typical single-family home, more in disaster-prone areas (Florida, California fire zones, Gulf Coast). Both are usually escrowed, meaning the lender collects 1/12 of the annual amount each month and pays the bills on your behalf.
Should I make a larger down payment if I can?
It depends. A larger down payment avoids PMI (above 20%), reduces your monthly payment, and lowers total interest paid. But it ties up cash that could go to retirement, emergency reserves, or higher-return investments. The minimum recommendation is enough to keep a 6–12 month emergency fund intact and not derail retirement savings. If you can comfortably do 20% without raiding those, do it. If not, putting down 10% with PMI is reasonable, especially in a low-rate environment.