What this calculator does
It estimates the amount that leaves your bank account each month for a home loan, broken into its parts, and shows how every payment splits between interest and principal over the life of the loan.
Most lenders quote a single principal-and-interest figure. That number is real, but it is not your housing payment. Property tax, homeowners insurance, private mortgage insurance (PMI) and homeowners association (HOA) dues can add hundreds of dollars a month. This calculator adds them back so the total matches what you will actually budget for.
Below the results you will find a chart of the balance falling over time and a schedule you can open year by year or month by month. Change any number and everything updates as you type. To share or save a scenario, use Copy link: the link carries your inputs, and they never leave your browser otherwise.
How the math works
The principal-and-interest part uses the standard amortization formula. It finds the one fixed payment that covers each month's interest and repays the balance to exactly zero on the final payment.
- M
- monthly principal and interest
- P
- loan amount (price minus down payment)
- r
- monthly rate: the annual rate ÷ 12 (6% → 0.005)
- n
- number of payments: years × 12
Each month, interest is the current balance times r. Whatever is left of the payment reduces the balance. Early on the balance is large, so most of the payment is interest; by the final years it is almost all principal. That is the shape you see in the chart.
The other parts are simpler:
- Property tax and homeowners insurance are annual bills divided by 12.
- PMI is estimated as an annual percentage of the loan amount, divided by 12. It applies only when the loan is more than 80% of the price, and the calculator stops it once the scheduled balance reaches 78% of the price, the point where federal law ends it on most conventional loans.
- HOA dues are added as entered.
Worked example
Take a $375,000 home with $75,000 down (20%), a 6% rate, a 30-year term, $3,600 a year in property tax, $1,200 a year for insurance and $50 a month in HOA dues.
Worked example
- Loan amount: $375,000 − $75,000 = $300,000.
- Monthly rate: 6% ÷ 12 = 0.5% = 0.005. Number of payments: 30 × 12 = 360.
- (1.005)360 = 6.022575. So M = $300,000 × 0.005 × 6.022575 ÷ 5.022575 = $1,798.65.
- Tax $3,600 ÷ 12 = $300.00. Insurance $1,200 ÷ 12 = $100.00. With 20% down there is no PMI. HOA adds $50.00.
Total monthly payment: $1,798.65 + $300.00 + $100.00 + $50.00 = $2,248.65. Over 30 years the loan costs $347,515 in interest.
The first payment's interest is $300,000 × 0.005 = $1,500.00, so only $298.65 goes to principal. With 10% down instead, the loan is $337,500, principal and interest rise to $2,023.48, and PMI at 0.5% adds $140.63 a month for about 8 years 7 months.
Common mistakes
- Budgeting on principal and interest alone. Tax and insurance often add 20% to 40% to the payment. Budget on the total.
- Mixing annual and monthly figures. Tax bills and insurance premiums are usually quoted per year. Enter them per year here; the calculator divides by 12.
- Using the APR as the rate. The APR folds fees into a yearly cost for comparison. Your payment is calculated from the note rate, the one printed as the interest rate on your Loan Estimate.
- Assuming PMI lasts forever, or forgetting it. With less than 20% down on a conventional loan, PMI is usually charged, but it is not permanent. FHA mortgage insurance follows different rules; see the FHA MIP calculator.
- Treating the escrow part as fixed. Tax assessments and insurance premiums change, and the escrow portion is recalculated every year. Only principal and interest stay fixed on a fixed-rate loan.
Limits of this estimate
- It assumes a fixed rate for the whole term. For an adjustable-rate loan, use the ARM payment calculator.
- Your real tax and insurance amounts depend on your property, your location and your insurer. Use the figures from your own bills or quotes.
- PMI pricing depends on your credit, down payment and the insurer, so the percentage is only a stand-in until you have a quote.
- Escrow accounts can include a cushion and the first year can differ from later years, so your lender's first payment may not match this exactly.
- Closing costs are not included. The cash to close calculator covers what you pay on closing day.
Frequently asked questions
What does PITI mean?
PITI stands for principal, interest, taxes and insurance: the four pieces most lenders collect each month. Principal and interest repay the loan. Property tax and homeowners insurance are usually collected into an escrow account and paid on your behalf when the bills come due. PMI and HOA dues sit on top when they apply.
Why is my lender's payment different from this estimate?
Usually because of taxes and insurance. Lenders base escrow on the actual tax bill and insurance premium, and may add a cushion. The principal-and-interest part should match to the cent if you enter the same loan amount, rate and term. If it does not, check whether the quote includes financed fees, points or a different loan amount.
When does PMI go away?
On most conventional loans, federal law ends borrower-paid PMI automatically when the balance is scheduled to reach 78% of the home's original value, and lets you ask to cancel it at 80%. The PMI removal calculator finds both months for your loan.
How much of my first payment goes to interest?
One month of interest on the full balance: the balance times the annual rate, divided by 12. On a $300,000 loan at 6%, that is $1,500.00 of the $1,798.65 principal-and-interest payment, leaving $298.65 for principal. The split shifts toward principal every month.
Does the loan term change the payment much?
Yes. A shorter term means fewer payments, so each one must repay more principal; a longer term lowers the payment but stretches interest over more years. Try changing the term in the calculator and watch both the monthly payment and the total interest.
Are taxes and insurance always included in the payment?
Not always. Many loans require an escrow account, but some borrowers pay tax and insurance bills directly. Either way, they are part of what owning the home costs each month, so this calculator includes them in the total.
Next steps: if this payment feels high, the affordability calculator works backward from your income. If you plan to pay extra each month, the extra payment calculator shows how much sooner you would be done. If you are putting down less than 20%, the PMI removal calculator finds the month PMI can end.