Mortgage Calculator
Calculate your monthly PITI payment including taxes, insurance, and PMI.
How Mortgage Payments Work
Your monthly mortgage payment is calculated using the loan amount, interest rate, and loan term. The standard formula for a fixed-rate mortgage is:
Where M = monthly payment, P = principal loan amount, r = monthly interest rate, and n = total number of payments.
Understanding PITI
PITI stands for Principal, Interest, Taxes, and Insurance — the four components of a typical monthly mortgage payment. Lenders use PITI to determine affordability.
Principal & Interest: The core loan repayment. Property Tax: Typically 0.5–2.5% of home value annually. Insurance: Protects against damage. PMI: Required when your down payment is less than 20%; typically 0.3–1.5% of the loan amount per year.
Tips to Save on Your Mortgage
- Make extra payments: Even $100/month extra can save thousands in interest and shorten your loan by years.
- Consider a 15-year term: Higher monthly payments, but significantly less total interest paid.
- Shop around: A 0.25% rate difference can save $15,000+ over 30 years on a $300k loan.
- Reach 20% equity to drop PMI: PMI typically costs $50–$200+/month. Once you reach 20% equity (78% LTV by law), PMI is removed automatically.
Important Considerations
- PITI vs P&I: Lenders often require your PITI to be no more than 28% of gross monthly income (the “front-end ratio”).
- Closing costs: Typically 2–5% of the loan amount, paid upfront.
- Rate type: This calculator assumes a fixed-rate mortgage. Adjustable-rate mortgages (ARMs) may start lower but can increase.
- HOA fees: Not included here, but condos and planned communities may add $200–$500+/month.
Frequently Asked Questions
What does PITI stand for and why does it matter?
PITI stands for Principal, Interest, Taxes, and Insurance. Lenders calculate your mortgage qualification based on total PITI, not just P&I, because taxes and insurance are real ongoing costs. The calculator lets you toggle the PITI components on or off so you can see both the P&I-only payment and the full monthly housing obligation.
When is PMI required and how much does it cost?
Private mortgage insurance (PMI) is required on conventional loans when your down payment is below 20% of the purchase price. The calculator applies PMI when the loan-to-value ratio exceeds 80%. Typical PMI costs 0.5–1% of the loan amount annually, which the calculator adds to your monthly payment.
How does the 30-year term compare to a 15-year mortgage?
A 15-year mortgage has a higher monthly payment but substantially lower total interest. On a $320,000 loan at 6.5%, a 30-year term costs roughly $410,000 in total interest while a 15-year term costs about $170,000 — a difference of $240,000. Enter both terms to compare the monthly payment trade-off against lifetime savings.
What is the amortization schedule for a mortgage?
In a standard fixed-rate mortgage, your monthly payment is constant but the split between interest and principal shifts over time. In the early years, most of your payment goes to interest; in later years, most goes to reducing principal. The mortgage calculator shows a full amortization schedule and a chart of principal vs. interest over the life of the loan.
Does this calculator include HOA fees or maintenance costs?
This calculator’s PITI section covers property tax, homeowners insurance, and PMI. It does not include HOA fees or home maintenance costs. For a complete monthly housing budget comparison, use the Rent vs. Buy calculator, which includes HOA and maintenance as separate inputs.