Mortgage Calculator
Most mortgage calculators show only principal and interest, which understates the real payment by a third or more. This one includes the rest.
Taxes, insurance and fees
- Loan amount
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- Total interest
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- Total paid
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What your mortgage payment is actually made of
A mortgage payment is usually four things, not one — often abbreviated PITI: principal, interest, taxes and insurance. On a $400,000 home with 20% down at 6.5%, principal and interest come to about $2,023 a month, but property tax and home insurance add roughly $517 more, making the real payment closer to $2,539. That is 26% higher than the figure most mortgage calculators show. If your down payment is under 20%, private mortgage insurance adds more still.
The four parts, explained
- Principal — the portion that actually reduces what you owe. Small at first, growing every month.
- Interest — the lender's charge on the outstanding balance. Large at first, shrinking every month.
- Property tax — set by your local authority as a percentage of assessed value. The US average is around 1.1%, but it ranges from about 0.3% in Hawaii to over 2% in New Jersey.
- Home insurance — required by every lender. National average is roughly $1,800 a year, far higher in coastal and wildfire-prone regions.
Taxes and insurance are usually collected monthly into an escrow account and paid on your behalf, which is why they appear in your payment rather than as separate bills.
Private mortgage insurance
Put down less than 20% and lenders generally require PMI, which protects them, not you, if you default. It typically costs 0.3% to 1.5% of the loan per year; this calculator estimates 0.5%.
PMI is not permanent. Under the US Homeowners Protection Act, you can request cancellation once your balance reaches 80% of the original value, and the lender must remove it automatically at 78%. Many people forget this and keep paying for years longer than necessary.
On a $360,000 loan, PMI at 0.5% is $150 a month — $1,800 a year for a policy that benefits the bank.
15-year versus 30-year
| $320,000 at 6.5% | 30 years | 15 years |
|---|---|---|
| Monthly principal & interest | $2,023 | $2,788 |
| Total interest | $408,142 | $181,758 |
The 15-year term costs $765 more each month and saves about $226,000 in interest. Shorter terms also usually carry a lower rate, widening the gap further.
The counter-argument is flexibility: a 30-year mortgage with voluntary overpayments gets you most of the interest saving while leaving you free to pay the smaller amount in a difficult month. That optionality has real value.
How to use the Mortgage Calculator
- Enter the home price and your down payment as a percentage.
- Enter the interest rate you have been quoted and pick a term.
- Adjust property tax, insurance and any HOA fee — the defaults are US national averages.
- Read the total, and the breakdown showing where each dollar goes.
Frequently asked questions
How much house can I afford?
A common guideline is that housing costs stay under 28% of gross monthly income, and all debt payments under 36%. Those are rules of thumb, not rules — your other commitments, job stability and savings matter more than the ratio.
Does this include closing costs?
No. Closing costs typically run 2–5% of the purchase price and are paid upfront, separately from the monthly payment.
What is escrow?
An account your lender uses to collect property tax and insurance monthly alongside your payment, then pay those bills when due. It is why those costs appear in your monthly figure.
How do I get rid of PMI?
Request cancellation once your loan balance reaches 80% of the home’s original value. It must be removed automatically at 78%. If your home has appreciated significantly, an appraisal may let you cancel sooner.
Why is my payment higher than this estimate?
Common reasons are a higher local tax rate than the 1.1% default, flood or earthquake insurance, HOA fees not entered, or a rate quote that included points. Compare against your lender’s Loan Estimate, which itemises everything.
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Last reviewed September 4, 2026. An estimate. Your lender’s loan estimate is the figure that binds.