Mortgage calculator guide
What does this calculator help you figure out?
A mortgage payment estimate combines the loan principal, interest rate, and term into a monthly principal-and-interest figure, then adds the other recurring costs of owning the home. This calculator starts from the home price and down-payment percentage to find the amount borrowed, applies the standard amortization formula, and adds property tax, home insurance, private mortgage insurance when the down payment is below 20%, and any HOA dues to show an estimated total monthly housing payment. Optional fields compare a second rate or down payment and show a housing-plus-debt-to-income ratio if you enter income. The monthly payment is only one part of the cost of owning or financing a home: closing costs, lender fees, points, utilities, maintenance, and rate changes on adjustable loans are excluded, and the result is a planning estimate rather than a lending offer or an affordability decision.
How is the result calculated?
Principal = home price × (1 − down payment ÷ 100). Principal and interest = P × r(1 + r)^n ÷ ((1 + r)^n − 1), with monthly rate r = annual rate ÷ 12 ÷ 100 and n = years × 12. Monthly housing payment = principal and interest + property tax ÷ 12 + insurance ÷ 12 + PMI (if down payment < 20%) + HOA dues.
Worked example
Worked example with the defaults: a $350,000 home with 20% down means a loan of $350,000 × 0.80 = $280,000. At 6.5% for 30 years the monthly rate is 0.065 ÷ 12 = 0.005417 and there are 360 payments, so principal and interest come to $280,000 × 0.005417 × 1.005417³⁶⁰ ÷ (1.005417³⁶⁰ − 1) = $1,769.79. Property tax at 1.2% of the price is $350,000 × 0.012 ÷ 12 = $350.00 a month, insurance is $1,800 ÷ 12 = $150.00, and PMI is $0 because the down payment reaches 20%. The estimated monthly housing payment the calculator displays is $1,769.79 + $350.00 + $150.00 = $2,269.79. Over 360 payments the interest alone totals about $357,000.
Units and conversion notes
Enter the home price in currency, the down payment as a percentage of price, the annual interest rate as a percentage such as 6.5, and the term in years. Property tax is a percentage of home price per year, insurance is currency per year, PMI is a percentage of the loan per year, and HOA dues are currency per month. Confirm whether the rate is fixed, variable, or promotional; the formula assumes it stays constant for the whole term.
What does the result mean?
Compare total interest and cash requirements, not only the monthly result. Lender fees, insurance, taxes, maintenance, and refinancing can change affordability, and a lower payment from a longer term usually means much higher total interest.
Common mistakes to avoid
Do not treat principal and interest as the complete housing payment; in the default scenario taxes and insurance add $500 a month, or 22% on top. Do not assume approval based on this estimate, and do not enter the APR from a disclosure as the interest rate, because APR already includes fees. Do not forget PMI when putting down less than 20%: at 10% down the same house borrows $315,000 and adds about $131 a month of PMI on top of a higher $1,991 principal-and-interest payment. Property tax should be your assessor’s effective rate, which can differ from the listing estimate, and the calculator excludes closing costs, points, utilities, and maintenance entirely.
This is a planning estimate, not a lending offer or financial advice.
Common questions
Frequently asked questions
Does a mortgage payment include taxes?
Only if you enter them; this page adds property tax and insurance to principal and interest to show the full monthly housing cost, which is $2,269.79 for the default $350,000 home. Lenders that escrow taxes collect them the same way, so the escrowed payment is the figure to budget for.
Why does a small rate change matter?
Interest is applied over many payments, so rate, term, and balance interact across the entire amortization schedule. On the default $280,000 loan, moving from 6.5% to 7.0% raises principal and interest from $1,769.79 to about $1,862.85, or roughly $33,500 more over 30 years.
What is PMI and when does it apply?
Private mortgage insurance protects the lender when a conventional loan exceeds 80% of the home value. The calculator charges it only when the down payment is below 20%, using the annual rate you enter; at the default 0.5% on a $315,000 loan it is about $131 a month.
How much house can I afford?
Enter your gross monthly income and other debt payments to see the housing-plus-debt-to-income ratio. Many lenders look for a total ratio at or below 43%, but this calculator does not make an approval decision, and it ignores closing costs, reserves, and credit history.
Does this include closing costs or fees?
No. Lender origination fees, points, appraisal, title, and other closing costs typically add 2–5% of the purchase price up front and are excluded, as are utilities, maintenance, and any change to tax or insurance bills after purchase.
