Mortgage Calculator

Your monthly mortgage payment has four parts that lenders abbreviate as PITI: Principal, Interest, Taxes, and Insurance. Principal and interest come from amortizing the loan amount (home price minus down payment) over the loan term using the standard PMT formula. Property taxes are typically calculated as a percentage of the home's assessed value and divided by 12. Homeowners insurance is an annual premium also spread over 12 months.

If your down payment is less than 20%, lenders also charge Private Mortgage Insurance (PMI), usually 0.3%–1.5% of the loan amount per year. PMI drops off automatically once you reach 22% equity. HOA dues, if any, are added on top of PITI but are paid to your association — not your lender.

The amortization formula: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ−1], where M is the monthly payment, P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the number of payments (years × 12).

Suppose you're buying a $450,000 home with 20% down ($90,000) and a 7% interest rate on a 30-year fixed mortgage. Your loan amount is $360,000. The monthly principal and interest comes to about $2,395.

Add property tax at 1.1%/year ($412/mo), homeowners insurance at $1,500/year ($125/mo), and skip PMI (because you put 20% down). Your total monthly PITI is roughly $2,932. Using the 28% front-end DTI rule, you'd need about $125,700 in gross annual income to qualify comfortably.

Bumping the down payment to 25% saves about $200/month and avoids PMI even more comfortably. Dropping the rate by 1% (to 6%) saves another ~$236/month — which is why mortgage shoppers obsess over rate locks.

First-time buyers checking what they can afford on a given salary, before contacting a lender.

Comparing 15-year vs 30-year mortgages to see how much faster equity builds at a higher monthly payment.

Estimating PMI cost when putting less than 20% down (e.g. an FHA-style 3.5% down purchase).

Refinance shoppers checking how a lower rate would change their payment — pair this with our refinance calculator for break-even analysis.

Out-of-state moves where property tax rates vary dramatically (Texas at ~1.7% vs Hawaii at ~0.3%).

Closing costs — typically 2%–5% of the loan, paid once at purchase, not monthly.

Maintenance and repairs — budget around 1% of home value per year as a rule of thumb.

Utilities, which are often higher in a house than an apartment.

Capital gains, depreciation, or tax-deductible mortgage interest (consult a CPA).

ARM (adjustable rate) mortgages — this calculator assumes a fixed rate.

The 28/36 rule is the lending industry's classic affordability benchmark: housing costs (PITI + HOA) should not exceed 28% of gross monthly income (the front-end ratio), and total debt service (housing + auto + student loans + minimum credit card payments) should not exceed 36% of gross monthly income (the back-end ratio). Most conforming conventional loans tolerate up to 45% back-end DTI with compensating factors (large down payment, strong reserves, high credit score).

These ratios use gross income, not take-home. After federal and state income tax, FICA, health insurance, and 401(k) contributions, your actual after-tax housing share is closer to 35–40% of net income when you're at the 28% gross threshold. That's a meaningful chunk of every paycheck and the reason housing-cost burden is the dominant predictor of household financial stress.

Lenders look at the qualifying number; you should look at the comfortable number. A common personal-finance heuristic is to keep total housing at 25% of net pay rather than 28% of gross. The gap funds maintenance, emergencies, and the lifestyle compression that surprises first-time buyers in the first year.

Mortgage rates move with the 10-year Treasury yield and lender-specific risk premiums. A rate lock guarantees the quoted rate for a defined period (typically 30, 45, or 60 days) while underwriting completes. Locking too early risks paying for an extension if closing slips; locking too late risks the market moving against you. Most buyers lock at contract acceptance or shortly after.

Discount points let you buy down the interest rate. One point is 1% of the loan amount, paid upfront, in exchange for roughly 0.25 percentage points off the rate. The break-even is the months it takes for the rate-savings to recover the point cost. If you'll keep the loan past break-even (usually 4–7 years), points pay off; if you'll refinance or sell sooner, they don't.

Always shop at least three lenders within the same two-week window — credit bureaus treat rate-shopping inquiries as a single inquiry when clustered together. Compare APR, not just the rate: APR includes lender fees and gives you the true cost-of-credit comparison.