How this calculator works
Principal and interest use the standard fixed-rate formula on the loan amount (price minus down payment). Property tax is the annual rate on the home price divided by 12, insurance is the yearly premium divided by 12, and PMI is added only when the down payment is under 20%. The schedule shows how each year's payments split between interest and principal.
Worked example
With the example values below: Monthly payment, $2,633 (on a $340,000 loan). Change any number above to run your own.
What you enter
| Input | Example |
|---|---|
| Home price | $425,000 |
| Down payment | $85,000 |
| Interest rateExample rate; use your quote | 6.25% |
| Loan term | 30 years |
| Taxes & insurance | |
| Property tax rateAnnual, as % of home value | 1.1% |
| Homeowners insurance / yr | $1,800 |
| HOA dues / month | $0 |
| PMI rateCharged only when down payment is under 20% | 0.5% |
What makes up a mortgage payment
Lenders describe the monthly payment as PITI: principal, interest, taxes and insurance. Principal and interest repay the loan itself. Property tax and homeowners insurance are usually collected with the payment and held in an escrow account, then paid by the lender when the bills are due.
Two more costs can be added. Private mortgage insurance (PMI) applies to most conventional loans with less than 20% down; see the PMI calculator. Homeowners association (HOA) dues aren't paid through escrow but are part of what lenders count when they check affordability.
The mortgage payment formula
Principal and interest on a fixed-rate loan use M = P × r(1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r is the annual rate divided by 12 and n is the number of monthly payments. A $320,000 loan at 6.5% for 30 years works out to about $2,023 a month before taxes and insurance.
Early payments are mostly interest. In the first year of that loan, about $20,700 of the $24,300 you pay goes to interest. The share going to principal grows every month, which the amortization calculator shows month by month.
15-year vs. 30-year mortgages
A 15-year mortgage usually carries a lower rate and costs far less interest, but the payment is much higher. At 6% on $320,000, a 30-year loan costs about $1,919 a month and about $370,700 in total interest; a 15-year loan at 5.5% costs about $2,615 a month and about $150,600 in interest.
A 30-year loan gives more flexibility: you can still pay extra when you can afford it, as the mortgage payoff calculator shows, while keeping the lower required payment for months when money is tight.
How to lower your monthly payment
Each of these changes a different line of the payment, so the calculator's breakdown helps you see which one moves the total most.
- Make a larger down payment, which shrinks the loan and can remove PMI at 20%.
- Improve your credit score before applying; the credit score and mortgage rate calculator shows what each tier costs.
- Shop at least three lenders and compare Loan Estimates on the same day.
- Consider buying mortgage points if you'll keep the loan past the break-even point.
- Shop homeowners insurance and check whether your property tax assessment can be appealed.
Frequently asked questions
What is included in a mortgage payment?
Principal and interest on the loan, plus property tax and homeowners insurance when they're paid through escrow. Many loans also include PMI or FHA mortgage insurance, and HOA dues are an additional monthly cost if the property has them.
How much is the mortgage payment on a $300,000 loan?
At 6.5% for 30 years, principal and interest are about $1,896 a month. Property tax, insurance and any PMI come on top; with typical taxes and insurance the full payment is often $2,300 to $2,600.
How is a mortgage payment calculated?
With the amortization formula M = P × r(1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r is the monthly rate and n is the number of payments. Taxes, insurance, PMI and HOA dues are then added to get the full monthly cost.
Is it better to get a 15-year or 30-year mortgage?
A 15-year loan saves a lot of interest and builds equity faster but has a much higher payment. A 30-year loan keeps the payment affordable and flexible. If the 15-year payment would strain your budget, take the 30-year and pay extra when you can.
Does the mortgage calculator include PMI?
Yes. PMI is added when the down payment is under 20%, using the rate you enter. Once your balance reaches 78% of the original home value, PMI is removed automatically on conventional loans.
Grow what this calculator projects.
TruthSayer AI sends quantitative stock signals across valuations, earnings and dark-pool activity, each one traded in its own funded account first.
Estimates for planning only, not financial, tax or legal advice. Tax tools use 2026 federal figures (brackets, $16,100 / $32,200 standard deduction, $19,000 gift exclusion, $15M lifetime exemption). Rates shown as defaults are examples; replace them with quotes you actually receive.