Mortgage Calculator
What is a Mortgage Calculator?
A mortgage calculator estimates your full monthly home payment: principal and interest, property taxes, homeowners insurance and private mortgage insurance (PMI) when your down payment is under 20%. It is the number you compare with your budget before house hunting.
Enter the home price, down payment percentage, interest rate, term, annual property tax and insurance. The calculator splits the total into line items so you can see exactly where each dollar goes, and shows the total interest you would pay over the life of the loan.
Frequently Asked Questions
How is a mortgage payment calculated?
The principal and interest portion uses the amortization formula: M = P × r(1 + r)^n / ((1 + r)^n - 1). On top of that, most buyers pay 1/12 of their annual property tax and insurance each month, plus PMI if their down payment is under 20%.
What is PMI and when do I stop paying it?
Private mortgage insurance protects the lender when your down payment is under 20%. It typically costs 0.5-1% of the loan amount per year and automatically drops off once you build 20% equity, or can be removed at that point by request.
How much house can I afford?
A widely used guideline is the 28/36 rule: keep your housing payment under 28% of gross monthly income and total debt payments under 36%. Lenders also evaluate your credit score and debt-to-income ratio when approving your loan.
Should I put 20% down?
Putting 20% down avoids PMI and lowers your loan amount, but it is not mandatory - many programs allow 3-10% down. The tradeoff is paying PMI and carrying more debt. Run your numbers both ways to see which makes sense for you.