Mortgage Calculator
Your Payment Is More Than Principal and Interest
Most mortgage payment estimates stop at principal and interest, but the number that actually leaves your bank account each month typically includes property tax, homeowners insurance, and sometimes PMI or an HOA fee. Leaving those out understates the real monthly cost of owning a home — often by a few hundred dollars. This calculator adds them all together.
The Formula
M = P × [r(1+r)n] ÷ [(1+r)n − 1]
Total Monthly Payment = M + Monthly Property Tax + Monthly Insurance + Monthly PMI + Monthly HOA
P is the loan amount after your down payment, r is the monthly interest rate, and n is the number of monthly payments over the loan term. The escrow-style items (tax, insurance, PMI, HOA) are simply divided by 12 and added on top of the amortized principal-and-interest payment.
Why Each Piece Matters
- Down payment size — a larger down payment shrinks the loan amount directly and can eliminate PMI entirely once you cross 20% equity.
- Property tax and insurance — these are billed annually or semi-annually but usually collected monthly through an escrow account, so they belong in any realistic monthly figure.
- PMI — private mortgage insurance applies when the down payment is under 20% and protects the lender, not the buyer, until enough equity builds up.
- Comparing 15-year vs. 30-year terms — the shorter term carries a higher monthly payment but a dramatically lower lifetime interest bill.
15-Year vs. 30-Year: The Interest Trade-Off
On a $280,000 loan (home price minus down payment) at 6.5%, the term length changes both the payment and the total interest substantially:
| Term | Monthly P&I | Total Interest |
|---|---|---|
| 15 years | $2,439.10 | $159,038.11 |
| 30 years | $1,769.79 | $357,124.57 |
Property tax, insurance, PMI, and HOA are excluded from this comparison table since they don't change with loan term.
How to Use This Calculator
- Enter the Home Price and the Down Payment amount.
- Enter the Annual Interest Rate and Loan Term in years.
- Optionally enter Annual Property Tax, Annual Home Insurance, Annual PMI, and Monthly HOA Fees if they apply.
- Select Calculate for the full monthly payment, broken down in the explanation, plus total interest over the loan's life.
Related Calculations
Already have a mortgage and wondering if a new rate is worth it? Try the Mortgage Refinance Calculator, or see the full payoff timeline with the Amortization Schedule Calculator.