Mortgage Calculator
Yearly Amortization Schedule
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How to Calculate Your Monthly Mortgage Payment
A mortgage payment has four components, often called PITI: Principal, Interest, Taxes, and Insurance. Most online calculators only show principal and interest. This one includes property tax and home insurance so you see your true monthly housing cost before you commit to a purchase.
How to Use This Calculator
Enter your home price and down payment; the difference becomes your loan amount. Set your interest rate and loan term (30 years is the most common). Add your estimated yearly property tax and home insurance cost for a complete monthly figure. Hit Calculate to see the breakdown, the amortization schedule, and how much total interest you'll pay over the life of the loan.
What Each Component Means
Principal & Interest: The core loan repayment, calculated using your loan amount, rate, and term. In the early years of a 30-year mortgage, the majority of each payment goes toward interest, not principal. This gradually shifts as your balance decreases.
Property Tax: Collected by your local government, usually billed annually but paid monthly through escrow. Rates typically range from 0.5% to 2.5% of the home's assessed value per year depending on your state and county.
Home Insurance: Required by virtually all lenders to protect the property. The national average is roughly $1,200–$2,000 per year, though it varies based on location, home size, and coverage level.
PMI (not included): If your down payment is less than 20%, your lender will typically require Private Mortgage Insurance, which adds $50–$200/month or more. To estimate your total, factor this in manually until you reach 20% equity.
How the Math Works
The monthly principal and interest payment is calculated using the standard amortization formula:
Where M is the monthly payment, P is the loan amount (home price minus down payment), r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (years × 12). Property tax and insurance are simply divided by 12 and added on top.
Real-World Example
Say you're buying a $400,000 home with a $80,000 down payment (20%), a 6.5% interest rate, and a 30-year term. Here's how it breaks down:
- Loan amount: $320,000
- Monthly principal & interest: ~$2,023
- Property tax ($3,600/yr): $300/month
- Home insurance ($1,200/yr): $100/month
- Total monthly payment: ~$2,423
- Total interest over 30 years: ~$408,000
That last number surprises most first-time buyers. Over a 30-year term at 6.5%, you'll pay more in interest than the original purchase price of the home. That's why extra payments, even small ones, make such a large difference early on.
15-Year vs. 30-Year Mortgage
The 30-year mortgage keeps your monthly payment lower, but costs significantly more over time. A 15-year mortgage typically comes with a lower interest rate and cuts your total interest nearly in half, but the monthly payment is noticeably higher. Using the same $320,000 loan at 6.0% on a 15-year term, your monthly P&I jumps to about $2,703, but you save over $200,000 in interest and own the home outright in half the time.
The right choice depends on your cash flow, job stability, and other financial goals like retirement savings or an emergency fund. Many financial advisors suggest a 30-year mortgage with intentional extra payments as a flexible middle ground.
Tips to Lower Your Monthly Payment
- Put down 20% or more, which eliminates PMI and reduces your loan balance from the start.
- Shop your interest rate. Even a 0.25% difference on a $300,000 loan saves roughly $15,000 over 30 years.
- Buy points: paying discount points upfront lowers your rate for the life of the loan, which makes sense if you plan to stay long-term.
- Choose a longer term. A 30-year mortgage has lower monthly payments than a 15-year, though you'll pay more total interest.
- Keep an eye on your tax rate. If you believe the assessed value of your home is too high, you can appeal your property tax assessment in most jurisdictions.
Frequently Asked Questions
What's a good debt-to-income ratio for a mortgage?
Most lenders prefer a total debt-to-income (DTI) ratio of 43% or lower, meaning your total monthly debt payments, including your mortgage, shouldn't exceed 43% of your gross monthly income. Many lenders prefer 36% or below for the best rates.
Does this calculator include PMI?
No. Private Mortgage Insurance is not included because the cost varies significantly by lender and loan type. If your down payment is under 20%, add an estimated $50–$250/month to your result depending on your loan size and credit score.
What's the difference between interest rate and APR?
The interest rate is what the lender charges to borrow the principal. The APR (Annual Percentage Rate) includes the interest rate plus lender fees, giving a more complete picture of the loan's true cost. Always compare APRs when shopping lenders.
How much house can I actually afford?
A common rule of thumb is that your housing costs shouldn't exceed 28% of your gross monthly income. Use our house affordability calculator to find a number based on your specific income, debts, and down payment.
Is it better to rent or buy?
It depends on how long you plan to stay, local home prices, and your financial situation. Our rent vs. buy calculator runs the numbers so you can compare the true long-term cost of each option side by side.
The Number That Changed Everything
I remember the exact moment I fell in love with mortgage calculators.
My wife and I were sitting in our apartment, staring at the listing for a house we had fallen for and wondering if we could actually pull it off. We were young, we were broke, and honestly, we were nervous. But we believed in ourselves and in each other.
A friend told me to just Google a mortgage calculator. So I did.
I typed in the numbers, hit calculate, and there it was: a monthly payment we could actually picture. Not an estimate buried in fine print, not a number a banker would reveal three meetings in. Just a clear, honest answer in about two seconds.
We bought that house. Our children grew up in it. And a few years ago, we made the last payment.
That little calculator on a random website helped make all of it feel possible. I never forgot that. CalcBuddy exists because of that night in our apartment, two nervous kids with a dream, and the simple belief that the right tool at the right moment can change everything.