How this mortgage calculator works
Lenders usually quote only principal and interest, but the payment that leaves your bank account each month is bigger. This calculator adds the costs most homeowners actually pay:
- Principal and interest – the loan payment itself, based on the home price minus your down payment, the interest rate and the loan term.
- Property tax – entered as a yearly percentage of the home's value. Rates vary a lot by state and county; see our property tax by state table.
- Homeowners insurance – the yearly premium divided by 12.
- PMI (private mortgage insurance) – usually required on conventional loans when you put down less than 20%. We estimate it at 0.5% of the loan per year; your quote may be higher or lower depending on your credit score.
- HOA dues – monthly fees for condos and planned communities.
Open the year-by-year schedule to see how each payment is split. Early on, most of your payment goes to interest; over time, more of it pays down the balance.
Ways to lower your monthly payment
- Put down 20% or more to avoid PMI.
- Improve your credit score before applying; a better score usually means a lower rate.
- Compare loan estimates from at least three lenders.
- Consider a lower price range: our home affordability calculator shows a comfortable budget.
Frequently asked questions
What is included in a mortgage payment?
A full monthly housing payment usually includes principal, interest, property tax and homeowners insurance (often called PITI), plus PMI if you put down less than 20% and HOA dues if your home has them.
Is a 15-year or 30-year mortgage better?
A 15-year loan has a higher monthly payment but usually a lower rate and far less total interest. A 30-year loan keeps the payment lower and leaves more room in your budget. Compare both in the calculator by changing the loan term.
When can I stop paying PMI?
On most conventional loans you can ask your lender to cancel PMI once your balance reaches 80% of the home's original value, and it ends automatically at 78%. FHA loans have their own mortgage insurance rules.