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Financial

Mortgage Calculator

Calculate your monthly mortgage payment including principal, interest, taxes, and insurance (PITI). See the full amortization schedule.

Calculation Inputs

Results computed instantly — your data never leaves your device.

Live Results

Real-Time

Total Monthly Payment

$2,596.83

Principal & Interest

$2,096.83

Property Tax

$400

Insurance

$100

Total Interest Paid

$434,858.61

Total Cost

$754,858.61

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How to Use the Mortgage Calculator

  1. 1

    Enter the home price and down payment amount.

  2. 2

    Enter the annual interest rate and loan term (commonly 15 or 30 years).

  3. 3

    Optionally add property tax rate (annual % of home value), home insurance (annual $), and HOA fee (monthly $).

  4. 4

    See your complete PITI breakdown and total cost over the life of the loan.

Formula & Mathematical Basis

M_PI = L × [r(1+r)^n] ÷ [(1+r)^n − 1] M_Tax = HomeValue × TaxRate ÷ 1200 M_Ins = AnnualInsurance ÷ 12 Total Monthly = M_PI + M_Tax + M_Ins + HOA

Variable Key

L

Loan amount = Home Price − Down Payment

r

Monthly interest rate = Annual Rate ÷ 12 ÷ 100

n

Number of monthly payments = Loan term in years × 12

M_PI

Monthly principal and interest payment

M_Tax

Monthly property tax portion

M_Ins

Monthly home insurance portion

HOA

Monthly homeowners association fee (if applicable)

📝 PMI (Private Mortgage Insurance) applies when down payment is under 20% of purchase price. PMI typically costs 0.5–1.5% of the loan annually, added to the monthly payment. This calculator does not include PMI — add it manually if applicable.

Step-by-Step Examples

1

First-time buyer — $400,000 home, 10% down

Scenario: $400,000 purchase, $40,000 down, 6.85% rate, 30-year term, 1.2% tax, $1,200/yr insurance.

  1. 1.Loan amount: $400,000 − $40,000 = $360,000.
  2. 2.Monthly rate: 6.85% ÷ 12 ÷ 100 = 0.005708.
  3. 3.M_PI ≈ $2,361/mo.
  4. 4.M_Tax = $400,000 × 0.012 ÷ 12 = $400/mo.
  5. 5.M_Ins = $1,200 ÷ 12 = $100/mo.
  6. 6.Total PITI = $2,361 + $400 + $100 = $2,861/mo.
  7. 7.Note: PMI (~$150/mo) would apply due to <20% down.
✅ Monthly PITI: $2,861 | Total interest over 30 years: ~$490,000

Practical Use Cases

  • Determining how much house you can afford based on income
  • Comparing 15-year vs 30-year mortgage costs
  • Evaluating refinancing scenarios when interest rates drop
  • Understanding the full cost of homeownership beyond the list price
  • Calculating break-even point for paying points to lower interest rate
  • Rental property cash-flow analysis for real estate investors

Common Mistakes to Avoid

  • Omitting property taxes, insurance, and HOA from affordability calculations — PITI can be 30–50% higher than principal and interest alone.
  • Not budgeting for PMI when putting less than 20% down.
  • Assuming the listed interest rate equals the APR — compare APR across lenders for a fair comparison.
  • Ignoring closing costs (2–5% of loan amount) that must be paid upfront.
  • Underestimating ongoing maintenance costs — budget 1–2% of home value annually.

Glossary of Terms

PITI
Principal, Interest, Taxes, and Insurance — the four components of a total monthly mortgage payment.
PMI (Private Mortgage Insurance)
Required insurance on conventional loans when down payment is under 20%, protecting the lender if the borrower defaults.
LTV (Loan-to-Value Ratio)
Loan amount ÷ appraised home value, expressed as a percentage. LTV above 80% typically triggers PMI on conventional loans.
DTI (Debt-to-Income Ratio)
Total monthly debt payments ÷ gross monthly income. Most lenders require DTI below 43% (28% for housing alone).
Escrow
A lender-managed account funded by monthly payments to cover property taxes and homeowners insurance, ensuring they are paid on time.
Points
Upfront fees paid to reduce the interest rate. One point = 1% of the loan amount, typically reducing the rate by 0.25%.

Frequently Asked Questions

What does PITI stand for?

▾
PITI stands for Principal, Interest, Taxes, and Insurance — the four components of a complete monthly mortgage payment. Lenders use your PITI to determine if you can afford a mortgage.

How much down payment do I need?

▾
Conventional loans typically require 20% down to avoid PMI (private mortgage insurance). FHA loans allow as little as 3.5% down. The calculator shows your payment at any down payment amount.

How is the monthly mortgage payment calculated?

▾
The principal and interest portion uses the standard amortization formula. Property tax is your home value × tax rate ÷ 12. Insurance is your annual premium ÷ 12.

What is the 28% rule for mortgages?

▾
The 28% rule says your monthly mortgage payment should not exceed 28% of your gross monthly income. Lenders also look at total debt (36% rule). Use the calculator to find a payment that fits within these guidelines.

Sources & References

  1. [1]
    CFPB Mortgage Basics— Consumer Financial Protection Bureau, 2024
  2. [2]
    Conventional Loan Requirements— Fannie Mae, 2024
  3. [3]
    FHA Loan Limits and Requirements— U.S. Department of Housing and Urban Development, 2024

CalculatorFree Real Estate Finance TeamLicensed Mortgage Broker Review & HUD Guidelines

Verified against CFPB disclosure requirements and Fannie Mae underwriting standards.

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