Mortgage Calculator

Your monthly mortgage payment has two parts: the loan payment itself (principal and interest, shown on this page as the P and I output), and everything else that typically gets bundled into one monthly bill (property tax, homeowners insurance, PMI, and HOA fees, together sometimes called PITI).

The principal and interest portion uses the standard amortization formula: M = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the loan amount, r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments. This is the same formula lenders use to calculate your fixed monthly payment for the full life of the loan.

Private Mortgage Insurance protects the lender, not you, if you default on the loan. It is required on most conventional loans when your down payment is less than 20 percent of the home price, and it typically costs between 0.3 percent and 1.5 percent of the loan amount per year, added to your monthly payment.

• PMI is calculated on the loan amount, not the home price, so a larger down payment directly lowers it
• By federal law, your lender must automatically cancel PMI once your balance reaches 78 percent of the original home value
• You can request cancellation yourself once you reach 80 percent equity, which may be sooner than the automatic cutoff
• Extra payments toward principal reach that 80 percent threshold faster, which is one real way PMI and extra payments connect

Adding even a modest amount to your monthly payment, applied directly to the loan's principal, can meaningfully shorten a 30-year mortgage and cut the total interest you pay, because every extra dollar today stops accruing interest for every remaining month of the loan.

On a $240,000 loan at 6.5 percent over 30 years, for example, an extra $200 a month saves roughly 8 years and 2 months and around $96,000 in total interest. Enter your own numbers above and add an amount in the Extra Monthly Payment field to see your real Interest Saved and New Payoff Time.

This calculator models a fixed extra amount paid every month for the life of the loan. Refinancing to a shorter loan term is another real way to pay less total interest, and the Refinance Calculator can help you compare that against simply adding extra payments to your current loan. If you are planning a one-time lump-sum payment instead, or want the full year-by-year breakdown, the amortization table below and the Amortization Schedule Calculator both cover that.

A common rule of thumb, sometimes called the 28/36 rule, says to keep your total housing costs (the full monthly payment this calculator shows, including tax and insurance) under 28 percent of your gross monthly income, and all debt payments combined under 36 percent.

Most lenders will approve a debt-to-income ratio up to around 43 percent, but staying closer to 28 percent gives you real breathing room if your income changes or rates rise on any variable debt you carry. For a fuller affordability picture that factors in your income and existing debts directly, the Home Affordability Calculator is built specifically for that question. If you are still deciding how much to put down, the House Down Payment Calculator can help you weigh a larger down payment against PMI and your monthly payment size.