Mortgage Payment Calculator
Estimate your monthly payment including principal, interest, taxes, and insurance (PITI).
Your Estimated Monthly Payment
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Total Principal
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Total Interest
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Understanding Your Mortgage Payment
What is PITI? The 4 Parts of a Mortgage Payment
When you use a mortgage payment calculator, you’re typically calculating “PITI,” which stands for Principal, Interest, Taxes, and Insurance. These are the four main components that make up your monthly mortgage bill.
- Principal: This is the portion of your payment that goes directly towards paying down the original loan amount you borrowed. In the early years of your mortgage, this amount is relatively small but grows over time.
- Interest: This is the cost of borrowing the money, paid to the lender. In the beginning of the loan, the interest portion of your payment is much larger than the principal portion.
- Taxes: This refers to property taxes, which are collected by your local government. Your lender typically collects these funds in an escrow account and pays the tax bill on your behalf.
- Insurance: This includes homeowner’s insurance (required to protect the property) and, if you make a down payment of less than 20%, Private Mortgage Insurance (PMI) to protect the lender.
How Our Mortgage Payment Calculator Works
Our tool simplifies the complex calculations involved in determining your monthly housing cost. By adjusting the inputs in this mortgage payment calculator, you can see how different factors affect your payment:
- Home Price & Down Payment: A higher home price or a smaller down payment increases your loan amount (principal), leading to a higher monthly payment.
- Interest Rate: Even a small change in the interest rate can have a significant impact on your monthly payment and the total interest you’ll pay over the life of the loan.
- Loan Term: A shorter loan term (e.g., 15 years) results in a higher monthly payment but significantly less total interest paid. A longer term (e.g., 30 years) has a lower monthly payment but higher total interest costs.
The Importance of the Amortization Schedule
The amortization schedule provided by our mortgage payment calculator is a powerful feature. It shows you a detailed, month-by-month breakdown of every payment you’ll make over the entire loan term. For each payment, you can see exactly how much is going towards principal and how much is going towards interest. This schedule clearly illustrates how your loan balance decreases over time and how you build equity in your home with each payment.
Frequently Asked Questions about Mortgage Payments
How do I use this Mortgage Payment Calculator?
Simply enter the price of the home, your down payment amount, the interest rate, and the loan term. For a more accurate estimate, add your expected annual property taxes and homeowner’s insurance. The calculator will instantly show your estimated monthly PITI payment.
How can I lower my monthly mortgage payment?
There are several ways to lower your payment. The most effective methods are making a larger down payment, finding a lower interest rate, or choosing a longer loan term (like 30 years instead of 15). Our mortgage payment calculator is a great tool for experimenting with these variables to see how they impact your monthly cost.
What is PMI?
Private Mortgage Insurance (PMI) is a type of insurance required by lenders if your down payment is less than 20% of the home’s purchase price. It protects the lender in case you default on the loan. PMI is typically an extra monthly cost that is added to your mortgage payment until you reach 20% equity in your home.
What is an Escrow Account?
An escrow account is a special account that your mortgage lender sets up to hold the funds for your property taxes and homeowner’s insurance. A portion of your monthly mortgage payment goes into this account, and the lender uses it to pay those bills on your behalf when they are due. This mortgage payment calculator includes fields for taxes and insurance to give you a complete picture of your total monthly housing cost.