About this calculator
A mortgage calculator estimates the monthly cost of buying a home with a loan. This tool returns your principal & interest (P&I) payment, or the full PITI figure that also includes property tax, home insurance, and PMI when applicable. Every assumption used is displayed and editable, and every number is computed from a transparent formula — not a black-box estimate.
How a mortgage payment is calculated
The monthly principal & interest payment uses the standard amortization formula:
P = L × r(1+r)ⁿ / ((1+r)ⁿ − 1)
where L is the loan amount, r is the monthly interest rate (APR ÷ 12), and n is the total number of monthly payments (loan years × 12). A 30-year loan on a $450,000 home with 10% down at 7% works out to roughly $2,696/month in P&I.
What's included in PITI
- Principal & interest — what you owe the lender each month, computed above.
- Property tax — typically 0.5%–2.5% of the home's value annually, paid in monthly escrow. This calculator uses 1.10% as a national average; check your county.
- Home insurance — required by lenders; ~$1,400/year is a reasonable national default but varies heavily by region (Florida and California run much higher).
- PMI (private mortgage insurance) — required when your down payment is less than 20%. Typically 0.3%–1.2% of the loan annually. We use 0.55%.
When PMI applies and how to remove it
PMI protects the lender if you default. It applies on conventional loans with less than 20% down, and is automatically removed once you reach 22% equity (or you can request removal at 20%). On a $450,000 home with 10% down, you would need roughly $45,000 more in equity — either through extra payments, appreciation, or a re-appraisal — to drop PMI. The What-if panel on this calculator shows the impact instantly.
15-year vs 30-year — which is better?
A 30-year mortgage has a lower monthly payment but you pay much more total interest — often more than the loan itself. A 15-year loan typically has a slightly lower rate and dramatically less interest, but the monthly payment is roughly 50% higher. The right answer depends on your cash-flow flexibility, alternative investment returns, and how long you plan to stay. Use the Rent vs Buy calculator to model the full picture.
What's a good interest rate?
Mortgage rates change daily and depend on your credit score, loan size, down payment, and the prevailing 10-year Treasury yield. Over the last 50 years, 30-year rates have averaged roughly 7.5%; the historic low was under 3% in 2021. Always compare quotes from at least 3 lenders — a 0.5% rate difference on a $400k loan is over $40,000 in interest over 30 years.
How to use this calculator
- Enter the home price, your down payment percentage, the interest rate you've been quoted, and the loan term.
- Toggle P&I + Tax + Ins to see your true out-of-pocket monthly cost.
- Read the Plain English insights for watch-outs and one-click What-if scenarios.
- Share the URL to send the exact scenario to your partner, agent, or lender.