How the mortgage calculator works
Your monthly mortgage payment has two core parts — principal (the loan balance you pay down) and interest (the cost of borrowing) — often shown together as “P&I”. Lenders usually also collect property tax and homeowners insurance monthly, and this is called your PITI payment. This calculator adds optional tax, insurance and HOA on top of P&I so you see the true monthly cost.
The formula
Monthly principal & interest is calculated with the standard amortization formula: M = P · r · (1+r)ⁿ / ((1+r)ⁿ − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments (years × 12).
Tips to lower your payment
A larger down payment reduces the loan amount and can remove private mortgage insurance. A lower interest rate or a longer term reduces the monthly payment (though a longer term means more total interest). Use the year-by-year table to see how much faster you build equity over time.
Frequently asked questions
What is included in a monthly mortgage payment?
Principal, interest, and usually property taxes and homeowners insurance (together called PITI). If you have a condo or planned community you may also pay HOA dues. This calculator lets you include all of them.
How much house can I afford?
A common guideline is that your total monthly housing payment stays under about 28% of your gross monthly income, and total debts under about 36%. Try different home prices and down payments here to find a comfortable payment.
Does a bigger down payment reduce my payment?
Yes. A larger down payment lowers the loan amount, which lowers both your monthly principal & interest and the total interest paid. Putting down 20% or more also typically removes the need for private mortgage insurance (PMI).
Is this the same as what a lender will quote?
It's a close estimate for planning. Actual quotes depend on your credit, loan type, PMI, points, and exact tax and insurance figures, so treat this as a guide rather than an official offer.