Mortgage Calculator
Free Online PITI Calculator
Use this free mortgage calculator to get a full PITI breakdown — Principal, Interest, Taxes & Insurance — plus an amortization schedule.
What Is a Mortgage Calculator?
A mortgage calculator estimates your monthly mortgage payment based on the loan amount, interest rate, and loan term. This calculator goes further — it includes a full PITI breakdown: Principal, Interest, Property Taxes, and Homeowners Insurance, plus Private Mortgage Insurance (PMI) when your down payment is less than 20%.
Use this calculator before house hunting to set a realistic budget, or after finding a home to compare mortgage scenarios. It's especially useful for first-time buyers who want to understand exactly where their monthly payment goes.
Total Monthly Payment
$2,522.62
Loan amount: $320,000
Loan Summary
These numbers are estimates based on the inputs you provided.
A licensed loan officer can give you an accurate quote based on your credit score, employment history, and lender-specific programs.
How to Use This Mortgage Calculator
This calculator gives you a complete picture of what your monthly mortgage payment will look like — not just the loan portion, but every cost that comes with owning a home. Here is how to use it step by step.
Step 1 — Enter the Home Price
Start by typing the purchase price of the home you are considering. This is the full asking or agreed price before any down payment is applied.
Step 2 — Set Your Down Payment
Enter your down payment as either a dollar amount or a percentage — both fields are live and will sync with each other automatically. For example, type 20 in the % field and the dollar amount will calculate instantly, or type a specific dollar amount and the percentage will update. A down payment of at least 20% avoids PMI (private mortgage insurance).
Step 3 — Enter the Interest Rate
Enter the annual interest rate offered by your lender. If you are shopping around, try a few different rates to see how much difference even half a percent makes over the life of the loan. As of 2025, rates for a 30-year fixed mortgage typically range between 6% and 8% depending on your credit profile.
Step 4 — Choose Your Loan Term
Select how many years you want to repay the loan — 10, 15, 20, or 30 years. A shorter term means higher monthly payments but significantly less interest paid overall. A 30-year loan gives you the lowest monthly payment but you will pay the most interest in total.
Step 5 — Add Property Tax, Insurance, and HOA
These three costs are often overlooked by first-time buyers but they are a real part of your monthly obligation. Enter your estimated annual property tax and annual home insurance premium. If your community has a homeowners association, add the monthly HOA fee as well. All of these are included in your total monthly payment shown on the right.
How Is a Mortgage Payment Calculated?
The core of your mortgage payment is the Principal and Interest (P&I) portion. This is calculated using a standard amortization formula that spreads your loan balance evenly across all your payments so that every payment is the same amount, even though the mix of principal and interest shifts over time.
In the early years of your mortgage, the majority of each payment goes toward interest because the loan balance is high. Over time, as your balance decreases, more of each payment goes toward paying down the principal. By the final years of your loan, almost everything goes to principal. This is why the amortization schedule is such a powerful tool — it shows you exactly how your equity grows year by year.
The formula used is: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1] — where P is your loan amount, r is your monthly interest rate (annual rate divided by 12), and n is the total number of payments (years × 12).
What Does Each Term Mean?
PITI
PITI stands for Principal, Interest, Taxes, and Insurance. It is the standard term mortgage professionals use to describe the full monthly housing payment. Lenders use your PITI payment when calculating your debt-to-income ratio (DTI) to determine whether you qualify for a loan.
Principal
The principal is the actual amount you borrowed — the loan balance. Each monthly payment chips away at this balance. The portion of your payment that goes to principal builds your equity in the home.
Interest
Interest is the cost of borrowing money, paid to the lender. It is calculated as a percentage of your remaining loan balance each month. The higher your balance and the higher the rate, the more interest you pay. Over a 30-year loan at 7%, you can end up paying nearly as much in interest as the original loan amount.
Down Payment
The down payment is the upfront cash you pay toward the purchase price. The remainder becomes your loan. A larger down payment reduces your loan amount, lowers your monthly payment, saves you significant interest over time, and eliminates the need for PMI if you put down 20% or more.
Property Tax
Property taxes are charged by your local government based on the assessed value of your home. They vary widely by location — from under 0.5% annually in some states to over 2% in others. Your lender typically collects a portion of your annual property tax each month and holds it in an escrow account, then pays the tax bill on your behalf.
Home Insurance (Hazard Insurance)
Home insurance protects your property against fire, storms, theft, and other damages. Lenders require you to carry it as a condition of the loan. Like property tax, it is usually escrowed — collected monthly and paid by the lender when the annual premium is due. A typical policy runs between $800 and $2,000 per year depending on your home's value and location.
PMI — Private Mortgage Insurance
PMI is required when your down payment is less than 20% of the home price. It protects the lender (not you) in case you default on the loan. PMI typically costs between 0.41% and 1.50% of your loan amount per year — and your credit score is the biggest factor. A 760+ score might cost you just $0.41 per $100 borrowed annually, while a score below 640 can push that to $1.30 or more. The good news is that PMI goes away once you've built up 20% equity in your home — either by paying down the loan or through home value appreciation.
HOA — Homeowners Association Fee
If you buy a home in a planned community, condo, or townhome complex, you may be required to pay HOA fees. These cover shared amenities and maintenance like landscaping, pools, hallways, and building exteriors. HOA fees are not included in your mortgage but they are a real monthly cost and lenders factor them into your DTI.
Loan Term
The loan term is the length of time you have to repay the mortgage. The most common terms are 15 and 30 years. A 15-year mortgage builds equity faster and costs far less in interest, but the monthly payments are considerably higher. A 30-year mortgage is the most popular choice because it offers the lowest monthly payment, giving borrowers more flexibility in their budget.
Amortization
Amortization is the process of paying off your loan in equal installments over time. Even though your payment stays the same every month, the split between principal and interest changes with every payment. The amortization schedule in this calculator shows you a year-by-year view of how much you are paying toward principal versus interest, and what your remaining balance is at the end of each year.
How Your Mortgage Payment Is Calculated
PITI stands for Principal, Interest, Taxes, and Insurance — the four components of a full monthly mortgage payment. Most people only think about P&I when budgeting for a home, but taxes and insurance can add hundreds of dollars per month to your payment. Property taxes vary by location and can range from 0.5% to over 2% of your home value annually. Homeowners insurance typically runs $800–$2,000 per year. On top of that, if your down payment is below 20%, PMI (Private Mortgage Insurance) applies — typically 0.5% to 1.5% of the loan amount annually, depending on your credit score.
How to Lower Your Monthly Mortgage Payment
Several strategies can reduce your monthly payment. A larger down payment reduces your loan amount and eliminates PMI once you reach 20% — which can save $100–$300/month on its own. Choosing a longer loan term (30 years vs. 15 years) lowers the payment but increases total interest paid over the life of the loan. Buying mortgage discount points at closing permanently lowers your rate. Shopping multiple lenders before committing can save 0.25%–0.5% in rate, which adds up to tens of thousands over 30 years. Finally, improving your credit score before applying — even by 20–40 points — can meaningfully lower the rate you qualify for.
Common Mortgage Calculator Mistakes to Avoid
Many buyers make the mistake of only looking at the principal and interest payment and forgetting to add property taxes and insurance — which leads to payment shock at closing. Others don't account for HOA fees, which can range from $50 to $1,000+ per month in some communities. Another common error: assuming the rate shown in this calculator is the rate you'll actually qualify for. The rate you receive depends heavily on your credit score, down payment size, loan type, and lender. The rate here is an estimate — always get a Loan Estimate (LE) from a licensed lender for accurate, binding numbers before making a purchase decision.
Frequently Asked Questions
What does PITI mean in a mortgage payment?
PITI stands for Principal, Interest, Taxes, and Insurance. These four components make up your full monthly mortgage payment. Principal reduces your loan balance. Interest is the cost of borrowing. Property taxes are collected monthly and held in escrow. Homeowners insurance protects your property. This mortgage calculator shows all four components.
How much mortgage can I afford?
Most lenders follow the 28/36 rule — your monthly mortgage payment should not exceed 28% of your gross monthly income, and total debt payments should not exceed 36%. Use our Home Affordability Calculator for a more detailed affordability analysis based on your income and debts.
What is PMI and when does it go away?
PMI (Private Mortgage Insurance) is required when your down payment is less than 20% of the home price. It protects the lender if you default. PMI typically costs 0.5%–1.5% of the loan annually. It automatically cancels once your loan balance reaches 80% of the original home value under the Homeowners Protection Act.
What is the difference between a 15-year and 30-year mortgage?
A 15-year mortgage has higher monthly payments but significantly lower total interest — you pay off the loan faster and build equity quicker. A 30-year mortgage has lower monthly payments, making homeownership more accessible, but you pay roughly twice as much total interest over the life of the loan. This mortgage calculator lets you compare both.
How accurate is this mortgage calculator?
This mortgage calculator uses standard amortization formulas used by lenders to calculate P&I. Property tax and insurance estimates are based on your inputs. Actual loan terms depend on your credit score, lender, loan type, and location. Always get a Loan Estimate from a licensed lender for binding numbers.
Formula & Methodology
This calculator uses the standard amortization formula to compute the monthly principal and interest payment. Property taxes and insurance are divided by 12 and added directly. PMI is calculated as an annual percentage of the original loan balance, divided by 12, and removed automatically once the loan balance reaches 80% of the original home value.
Where M = monthly payment, P = loan principal, r = monthly interest rate (annual rate ÷ 12), n = total number of payments (loan term in years × 12)
References
- Fabozzi, F. J. (2005). The Handbook of Fixed Income Securities. McGraw-Hill. (Standard mortgage amortization formula)
- Consumer Financial Protection Bureau (CFPB). "What is PITI?" consumerfinance.gov
- Freddie Mac. "Understanding PMI." freddiemac.com
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