Mortgage Calculator
Calculate your total monthly mortgage payment with taxes, insurance, PMI, and HOA included.
How Mortgage Payments Work
A mortgage payment is more than just paying back the loan. Your total monthly payment typically includes four components known as PITI: Principal (the amount that reduces your loan balance), Interest (the cost of borrowing), Taxes (property tax collected by your local government), and Insurance (homeowner's insurance to protect your property). If your down payment is less than 20%, you'll also pay PMI (Private Mortgage Insurance), and if your property is in a homeowners association, monthly HOA dues apply too.
The principal and interest portion is calculated using 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, and n is the total number of payments. For example, on a $400,000 home with 20% down ($80,000), you'd borrow $320,000. At 6.5% over 30 years, the monthly P&I payment would be approximately $2,023. Over the life of the loan, you'd pay about $408,000 in interest alone.
Your down payment significantly impacts your monthly cost. Putting down 20% or more avoids PMI, which typically costs 0.5% to 1% of the loan amount annually. On a $320,000 loan, that's $133–$267 per month in extra cost. If you can only put down 10%, your loan amount increases to $360,000, your P&I payment rises, and you'll also pay PMI until you reach 20% equity. Even a 5% difference in down payment can change your monthly payment by hundreds of dollars.
Property taxes and insurance are often overlooked but add substantially to your monthly cost. Property tax rates vary widely by location — from under 0.5% in some states to over 2% in others. On a $400,000 home, that's $167 to $667 per month. Homeowner's insurance typically costs $1,000–$2,000 annually depending on location, home value, and coverage level. These costs are usually collected monthly by your lender and held in an escrow account.
To reduce your monthly mortgage payment, consider these strategies: make a larger down payment to lower the loan amount and eliminate PMI; choose a longer term (30 years vs 15) for lower monthly payments, though you'll pay more interest overall; shop around for the best interest rate, as even 0.25% can save tens of thousands over the loan life; and review your property tax assessment for accuracy. Use this calculator to model different scenarios and find the right balance between monthly affordability and total cost.