How it works
Understanding the inputs
- Home price — the purchase price you expect to pay. Your loan amount is the home price minus your down payment.
- Down payment — the cash you put down at closing. Putting down 20% or more usually avoids PMI and lowers both your payment and total interest.
- Interest rate — the annual note rate on the loan (not the APR, which also folds in fees). Use a current quote from a lender for the most accurate estimate.
- Loan term — how long you'll take to repay, in years or months. 30 and 15 years are the most common fixed-rate terms.
- Property tax — your yearly property tax bill. It varies widely by county; a rough national range is 0.5%–2% of the home's value per year. Check the listing or your county assessor.
- Home insurance — your annual homeowners policy premium. Lenders require it, and it's often collected monthly through escrow along with taxes.
- PMI rate — private mortgage insurance, quoted as a yearly percentage of the loan (commonly about 0.3%–1.5%). It's only applied when your down payment is below 20%.
- HOA dues — monthly homeowners association fees, if the property has them. They're not paid to your lender but they're part of your housing cost.
Want local numbers? Our mortgage calculators by state are pre-filled with each state’s median home value, property tax rate and insurance cost, and we have payment pages for $300k and other loan amounts.
The mortgage payment formula
Principal and interest for a fixed-rate mortgage use the standard amortizing payment formula:
M = P × r(1 + r)n / ((1 + r)n − 1)
where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly payments. Your total monthly payment is then:
Total = M + property tax/12 + insurance/12 + PMI + HOA
PMI is calculated as loan amount × PMI rate ÷ 12 and, by default, drops off automatically when the original schedule reaches 78% of the original value (Homeowners Protection Act automatic termination, CFPB). With “request at 80%” it stops when your actual balance reaches 80% (extra payments get you there sooner). Optional extra payments (monthly, or a one-time lump sum in a chosen month) go straight to principal; the results show months and interest saved. Each month, interest = remaining balance × r and the rest of M reduces principal, which is why early payments are mostly interest and later ones are mostly principal — the chart above shows this shift year by year.
Monthly payment by rate and term
This table, calculated with the same formula, shows principal and interest on a $300,000 loan at common rates. Taxes, insurance and PMI are extra.
| Rate | 15-year | 20-year | 30-year | 30-yr total interest |
|---|---|---|---|---|
| 5.00% | $2,372.38 | $1,979.87 | $1,610.46 | $279,767.35 |
| 5.50% | $2,451.25 | $2,063.66 | $1,703.37 | $313,212.12 |
| 6.00% | $2,531.57 | $2,149.29 | $1,798.65 | $347,514.57 |
| 6.50% | $2,613.32 | $2,236.72 | $1,896.20 | $382,633.47 |
| 7.00% | $2,696.48 | $2,325.90 | $1,995.91 | $418,526.69 |
| 7.50% | $2,781.04 | $2,416.78 | $2,097.64 | $455,151.67 |
| 8.00% | $2,866.96 | $2,509.32 | $2,201.29 | $492,465.74 |
Worked examples
$375,000 home, $75,000 (20%) down, 6.5% for 30 years, $4,500/yr tax, $1,500/yr insurance
Loan: $300,000.00. Principal & interest: $1,896.20; with tax ($375.00) and insurance ($125.00) the total is $2,396.20/month. No PMI because the down payment is 20%. Total interest over 30 years: $382,633.47.
$350,000 home, 5% ($17,500) down, 6.5% for 30 years, $4,200 tax, $1,400 insurance, 0.5% PMI, $50 HOA
Loan: $332,500.00. Principal & interest: $2,101.63, PMI $138.54/month for 135 months (about 11.3 years), for a total of $2,756.83/month until PMI automatically drops off at 78% of the original value ($18,703.13 of PMI in all). Requesting cancellation at 80% instead would end it after 124 months, saving $1,523.96. Total interest: $424,085.42.
The same loan with $200 extra a month
Adding $200.00 to principal each month pays the loan off in 283 months instead of 360, saving $106,580.82 of interest. Because the balance reaches 80% sooner, requesting PMI removal at 80% ends PMI after 84 months.
What affects your mortgage payment
Loan amount. Every extra $10,000 borrowed at 6.5% for 30 years adds about $63.21 to the monthly principal and interest. A bigger down payment shrinks the loan and can eliminate PMI.
Interest rate. Rates depend on market conditions, your credit score, the loan type and your down payment. As the table shows, each half-point changes the payment on a $300,000 loan by roughly $95–$100 a month.
Loan term. Shorter terms mean higher payments but dramatically less total interest, and shorter-term loans often carry lower rates too.
Taxes, insurance and HOA. These can add hundreds of dollars a month and can change over time — property taxes are reassessed and insurance premiums rise. They're why two homes at the same price can have very different payments.
PMI. With less than 20% down, PMI adds cost until you reach 20% equity. Paying extra principal early gets you there faster.
Fixed-rate vs. adjustable-rate mortgages
This calculator assumes a fixed-rate loan, where the interest rate and principal-and-interest payment never change. An adjustable-rate mortgage (ARM) starts with a fixed rate for a set period — often 5, 7 or 10 years — and then resets periodically based on a market index plus a margin, subject to caps. ARMs can start cheaper, but the payment can rise later. To stress-test an ARM, run this calculator at the initial rate and again at the maximum rate allowed by the caps to see your best and worst cases.
How lenders look at your payment
Lenders compare your total housing payment (PITI plus HOA) with your gross monthly income. A common guideline is to keep housing costs at or below about 28% of gross income and total debt payments at or below about 36%, although many loan programs allow higher ratios. They will also review your credit history, savings reserves and employment. Knowing your full monthly payment before you apply helps you choose a comfortable price range rather than the maximum a lender might approve.
Tips to lower your mortgage cost
- Shop several lenders. Even a small rate difference adds up to thousands over the life of the loan. Compare loan estimates on the same day.
- Improve your credit first. Higher credit scores generally qualify for better rates and cheaper PMI.
- Aim for 20% down if you can. It avoids PMI and reduces the amount that accrues interest.
- Consider a shorter term. If the payment fits your budget, a 15- or 20-year loan builds equity much faster.
- Make extra principal payments. Even one extra payment a year can shorten a 30-year loan by several years. Confirm your loan has no prepayment penalty.
- Check affordability first. Use the house affordability calculator to see a price range that fits the 28/36 guideline before you shop.
- Look at the full PITI. Budget for taxes, insurance, HOA and maintenance — not just principal and interest.
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Frequently asked questions
How is a monthly mortgage payment calculated?
Principal and interest use the fixed-rate amortization formula M = P × r(1+r)n / ((1+r)n − 1), where P is the loan amount, r the monthly rate and n the number of payments. Property tax, insurance, PMI and HOA dues are then added to get your full monthly housing payment (PITI).
What does PITI stand for?
PITI stands for principal, interest, taxes and insurance — the four main parts of a typical mortgage payment. Lenders use PITI (plus HOA dues, if any) when checking whether a payment fits your budget.
When do I have to pay PMI?
Conventional lenders usually require private mortgage insurance when your down payment is less than 20% of the home price. This calculator applies PMI only below 20% down and automatically removes it when the original amortization schedule reaches 78% of the original value (or at the loan’s midpoint), as the Homeowners Protection Act requires. Choose “request at 80%” to model asking your lender to cancel once your actual balance, including any extra payments, reaches 80%.
How much does a 0.5% rate difference matter?
On a $300,000 30-year loan, going from 6.5% to 7% raises the payment from $1,896.20 to $1,995.91 — $99.70 more per month and about $35,893.23 over the life of the loan.
Is a 15-year or 30-year mortgage better?
A 15-year loan has a higher payment but far less interest. In our example below, the 15-year version costs $2,613.32 a month in principal and interest versus $1,896.20 for 30 years, but saves $212,235.49 in interest. A 30-year loan offers more monthly flexibility.
Does this calculator include closing costs?
No. Closing costs (typically 2%–5% of the loan) are paid up front and are not part of the monthly payment. Use our refinance calculator to weigh closing costs against savings.
How can I share or save my results?
After you press Calculate, the page address updates with your inputs. Use “Copy shareable link” to send it to someone — the link reopens the calculator pre-filled and calculated. You can also print the amortization schedule.
Is my information stored anywhere?
No. All calculations run in your browser. Nothing you type is sent to a server or saved. See our privacy policy.