Mortgage Calculator – Estimate Your Monthly Payment
Estimate monthly mortgage principal and interest, with optional property tax and homeowners insurance inputs. Compare loan terms and see estimated total interest; PMI, HOA fees, and other costs are not included.
Mortgage Payment Calculator
How the Calculation Works
Formula: Monthly Payment = [Loan Amount × (Interest Rate / 12) × (1 + Interest Rate / 12)^(Months)] / [(1 + Interest Rate / 12)^(Months) - 1]
This calculator estimates principal and interest using the standard amortization formula, then adds the annual property tax and insurance amounts you enter, divided by 12. It does not calculate PMI, HOA fees, closing costs, or other housing expenses.
Key Inputs: The annual interest rate is divided by 12 for monthly calculations. The loan term determines the number of monthly payments. Tax and insurance inputs are estimates you provide.
Important Note: This is an estimate only. Actual costs and lender terms may differ. Verify figures with your lender and insurers before making a decision.
Worked Example
Example: You're buying a $350,000 home with a $70,000 down payment (20%), leaving a $280,000 loan at 6.5% interest over 30 years.
- Principal & Interest: $1,769.79/month
- Property Tax (estimated 1.1%): $320.83/month
- Homeowners Insurance (estimated): $150/month
- Total Estimated Monthly Payment: $2,240.62/month
- Total Interest Over 30 Years: $357,124.57
How to Use This Calculator
Understanding Your Results:
- Principal: The amount you're borrowing for the home
- Interest: The cost of borrowing the money
- Property Taxes: Taxes paid to your local government (varies significantly by location)
- Homeowners Insurance: Protection against loss or damage to your home
- Other housing costs: PMI, HOA fees, closing costs, and maintenance are not included in this estimate.
Your total monthly housing cost is important for determining whether a home is affordable. Many lenders use the "28/36 rule" as a general guideline: housing costs should typically not exceed 28% of your gross income, and total debt should typically not exceed 36%. However, lending standards vary by lender and loan program, and some lenders may use different criteria.
Frequently Asked Questions
How is a mortgage payment calculated?
Your monthly payment is calculated using an amortization formula based on your loan amount, interest rate, and loan term. The calculator adds the annual property tax and insurance amounts you enter, divided by 12. PMI, HOA fees, closing costs, and other expenses are not included.
What is PMI and when is it required?
PMI (Private Mortgage Insurance) is insurance that protects the lender if you default on your loan. Many lenders require mortgage insurance if your down payment is less than 20%, though requirements vary by lender, loan type, and borrower situation. Different mortgage insurance products exist, and requirements differ across programs. You may be able to remove PMI once you reach 20% equity, but this also varies by loan terms and lender policy. Always verify specific requirements and options with your lender.
Does this calculator include property taxes and insurance?
Yes. Enter annual property tax and insurance amounts to include them in the monthly estimate. The calculator does not include PMI, HOA fees, closing costs, or other expenses, and the values you enter should be verified for your situation.
How much does a larger down payment lower my monthly payment?
A larger down payment reduces the amount borrowed. The resulting payment difference depends on the loan amount, interest rate, loan term, and other housing costs.
How does interest rate affect my mortgage payment?
A higher interest rate generally increases principal-and-interest cost. The dollar impact depends on the loan balance, loan term, and size of the rate change. Use the calculator to compare specific scenarios.
Can I pay off my mortgage early?
Yes. You can pay extra toward principal each month, make biweekly payments instead of monthly, or make a lump-sum payment toward principal. Try our Mortgage Payoff Calculator to see how extra payments can save you money.