How to use this mortgage calculator
Start with the home price and your planned down payment — the calculator shows the down payment percentage as you type and borrows the rest. Add the interest rate and term your lender quoted, then fill in the ownership costs most first-time buyers forget: annual property tax, annual homeowners insurance, PMI if you're putting down less than 20%, and monthly HOA dues if they apply. The headline number is your all-in monthly housing payment, with a line-by-line breakdown below it.
What makes up a mortgage payment (PITI)
Lenders and real-estate agents talk about PITI: principal (the part that pays down your balance), interest (the lender's charge), taxes (usually collected monthly into an escrow account and paid to your county), and insurance (your homeowners policy, also usually escrowed). Two more items commonly ride along:
- PMI (private mortgage insurance) — required on most conventional loans with less than 20% down. It typically runs 0.3%–1.5% of the loan amount per year. This calculator automatically drops PMI from your payment once your balance reaches 80% of the home's value, which is when you can request cancellation.
- HOA dues — fixed monthly fees for condos and many planned communities. They don't reduce your loan, but they're part of what you must budget every month.
Only principal and interest are set by the amortization formula; taxes and insurance change over time, so treat those figures as estimates and re-check them yearly.
How to lower your monthly payment
The biggest levers are the ones in this calculator. A larger down payment shrinks the loan and can eliminate PMI entirely — moving from 10% to 20% down on a $400,000 home cuts the payment twice, once through a smaller balance and once by removing PMI. A longer term lowers the monthly payment but raises total interest sharply. Shopping the interest rate matters more than most buyers expect: on a $320,000 loan, a half-point rate difference changes the payment by roughly $100 a month and the lifetime interest by tens of thousands. Finally, use the extra-payment field to see how even modest additional principal shortens the payoff date — the chart plots both scenarios so the gap is easy to see.
Frequently asked questions
- What is included in a monthly mortgage payment?
- The core is PITI — principal, interest, property taxes, and homeowners insurance. Borrowers who put down less than 20% usually also pay PMI, and properties in an association add HOA dues.
- What is PMI and when does it go away?
- Private mortgage insurance protects the lender on low-down-payment loans and typically costs 0.3%–1.5% of the loan per year. You can request cancellation at 80% loan-to-value, and lenders must remove it automatically at 78%. This calculator drops PMI at the 80% mark and shows your total PMI cost.
- How much down payment do I need?
- Conventional loans go as low as 3% down, FHA 3.5%, and VA/USDA can be 0%. Putting 20% down avoids PMI and lowers the payment, but waiting years to save 20% can cost more than PMI does — run both scenarios above.
- Should I pay extra on my mortgage?
- Extra principal payments cut years and serious money off a 30-year loan. Whether they beat investing the difference depends on your rate and goals. Make sure extra amounts are applied to principal and your loan has no prepayment penalty. For the pure loan math, see the loan calculator.