Mortgage Payment
Calculator
Calculate your monthly mortgage payment and see how much you can save on your rate.
Monthly mortgage payment calculator with taxes, insurance, and PMI
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How to Calculate Your Mortgage Payment (Formula, Example & Full Breakdown)
Use this mortgage payment calculator to estimate your monthly mortgage payment, including principal, interest, property taxes, homeowners insurance, and PMI. Whether you're buying a home or refinancing, understanding your full monthly payment helps you budget accurately and compare loan options.
Mortgage Payment Formula
Mortgage payments are calculated using an amortization formula that spreads your loan into equal monthly payments over time:M = P × [r(1 + r)^n] / [(1 + r)^n − 1]M = Monthly payment
P = Loan amount
r = Monthly interest rate
n = Number of payments (loan term in months)While most people use a mortgage calculator for speed, understanding the formula helps you see how interest rates and loan terms impact your total cost.
How a mortgage payment is calculated
Your principal and interest payment is determined by three factors: the loan amount (home price minus your down payment), the annual interest rate divided into monthly installments, and the loan term in months. Lenders use an amortization formula that front-loads interest — meaning in the early years of your mortgage, most of your payment goes toward interest rather than reducing your balance.
What is included in a mortgage payment
Most homeowners pay more than just principal and interest each month. A fully loaded mortgage payment often includes property taxes escrowed monthly, homeowner's insurance, and PMI if your down payment was under 20%. This calculator adds all of these together to give you a realistic total monthly cost.
Your total monthly mortgage payment is often referred to as “PITI” — Principal, Interest, Taxes, and Insurance. If your down payment is less than 20%, Private Mortgage Insurance (PMI) may also be included, increasing your monthly cost.
How to lower your monthly mortgage payment
- Increase your down payment to reduce the loan amount and eliminate PMI.
- Improve your credit score before applying to qualify for a lower interest rate.
- Choose a longer loan term to spread payments over more months.
- Shop multiple lenders — even a 0.25% rate difference can save tens of thousands over the life of a loan.
- Consider buying a less expensive home to stay within a comfortable payment range.
How Much House Can I Afford?
A common rule is that your monthly mortgage payment should not exceed 28–30% of your gross monthly income. Lenders also consider your total debt-to-income ratio (DTI), which typically should stay below 43%.Use this calculator to test different home prices, down payments, and interest rates to find a monthly payment that fits your budget comfortably.
15-year vs 30-year mortgage
A 30-year mortgage offers the lowest monthly payment but costs significantly more in total interest. A 15-year mortgage requires higher monthly payments but builds equity faster and can save hundreds of thousands in interest. Use the loan term selector above to compare both options side by side with your exact numbers.
When does PMI go away
Private Mortgage Insurance (PMI) is required when your down payment is less than 20% of the home value. Once your loan balance drops to 80% of the original home value — either through payments or appreciation — you can request PMI cancellation. Lenders are required by law to automatically cancel PMI when your balance reaches 78% of the original purchase price.
Use this calculator to compare scenarios
Try adjusting your down payment, loan term, and interest rate to see how each one affects your monthly payment and total interest. You can also use our credit card payoff calculator to reduce monthly debt or auto loan calculator to estimate car payments to get a full picture of your monthly debt obligations.
Mortgage Calculator FAQ
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Mortgage Tips to Lower Your Payment and Save on Interest
Reducing your monthly mortgage payment isn’t just about finding a lower rate — it’s about understanding how each part of your loan affects your total cost. Whether you’re using a mortgage payment calculator, house payment estimator, or comparing home loan options, small adjustments can lead to significant savings over time.
SMART WAYS TO LOWER YOUR MONTHLY MORTGAGE PAYMENT
- Increase your down payment to reduce the loan amount and avoid private mortgage insurance (PMI)
- Improve your credit score before applying to qualify for better mortgage rates
- Choose a longer loan term to spread payments out and reduce your monthly cost
- Compare multiple lenders — even a slightly lower interest rate can significantly reduce your monthly payment
- Consider buying below your maximum budget to keep payments manageable
HOW TO REDUCE TOTAL MORTGAGE INTEREST OVER TIME
- Make extra payments toward your principal to shorten your loan term
- Round up your monthly payment to consistently reduce your balance faster
- Refinance your mortgage if interest rates drop or your credit improves
- Avoid extending your loan term unless it meaningfully improves your financial situation
- Use a home loan calculator to compare long-term cost differences before making changes