Mortgage Payment Calculator
A mortgage payment is never just the loan itself. The number your lender quotes each month bundles principal and interest with property tax, home insurance, and sometimes PMI and HOA dues — and the difference between the loan payment and the full bill can be hundreds of dollars. This page explains every piece, works through real numbers, and gives you a free mortgage payment calculator to test your own home price, down payment, and rate.
The default example on this page is a $350,000 home with a $70,000 down payment, a 6.5% rate, and a 30-year term. That leaves a $280,000 loan, a principal-and-interest payment of $1,770 a month, and — once $3,500 a year of property tax and $1,500 a year of insurance are added — a total monthly payment of $2,186. Change any number in the calculator above and the whole breakdown updates instantly.
What Goes Into a Mortgage Payment?
Lenders and buyers usually talk about PITI: principal, interest, taxes, and insurance. Principal is the part of each payment that reduces the loan balance. Interest is the lender’s charge for the money, calculated on the balance that is still outstanding. Property tax goes to your local government, and home insurance protects the house itself. Most lenders collect the tax and insurance parts monthly into an escrow account and pay the bills for you, which is why the monthly figure you actually pay is higher than the loan payment alone.
Two more items can appear. PMI, private mortgage insurance, applies when the down payment is under 20% of the price; on this page it is estimated at 0.75% of the loan per year, which is about $175 a month on a $280,000 loan. HOA dues apply in many condos and planned communities and are paid separately from the mortgage, but they still come out of the same monthly budget. The mortgage calculator above adds all five pieces together so the number at the top is the number you actually pay.
The Mortgage Payment Formula
The principal-and-interest part follows one formula, used by every lender in the United States:
M = P × r(1+r)n ÷ ((1+r)n − 1)
Here P is the loan amount, r is the monthly interest rate (the annual rate divided by 12 and by 100), and n is the number of monthly payments. For the default example, P is $280,000, r is 0.065 ÷ 12 = 0.005417, and n is 360. Working through it gives a principal-and-interest payment of $1,770 a month. The formula looks heavy, but it only says one thing: each payment must cover that month’s interest and leave a little over to shrink the balance, so that the balance reaches exactly zero after the last payment.
Step by Step for the Default Example
- Find the loan amount. $350,000 price minus $70,000 down payment = $280,000.
- Find the monthly rate. 6.5% a year divided by 12 months = 0.5417% a month.
- Count the payments. 30 years × 12 months = 360 payments.
- Apply the formula. The result is $1,770 a month of principal and interest.
- Add tax and insurance. $3,500 a year of tax is $292 a month; $1,500 a year of insurance is $125 a month.
- Add the pieces. $1,770 + $292 + $125 = $2,186 total a month.
Worked Examples
The table below runs four realistic cases through the same formula at 6.5%, so you can see how price, down payment, and term move the payment. Notice that the 15-year loan on the default home costs $669 more a month than the 30-year loan — but the interest saving is enormous, which the next section shows.
| Home price | Down payment | Loan | Term | P&I per month |
|---|---|---|---|---|
| $350,000 | $70,000 (20%) | $280,000 | 30 years | $1,770 |
| $350,000 | $70,000 (20%) | $280,000 | 15 years | $2,439 |
| $400,000 | $80,000 (20%) | $320,000 | 30 years | $2,023 |
| $250,000 | $25,000 (10%) | $225,000 | 30 years | $1,422 |
The $400,000 example adds $4,000 a year of tax and $1,800 a year of insurance, giving a total of $2,506 a month. The $250,000 example has only 10% down, so PMI would apply on top of the $1,422 — roughly $141 a month at 0.75% of the loan — until the balance falls to 80% of the home value.
15-Year vs 30-Year: The Interest Gap
The term you choose is the biggest lever on total cost. On a $280,000 loan at 6.5%, the 30-year loan costs $357,125 in interest over its life, while the 15-year loan costs $159,038. That is a saving of $198,086 — more than half the loan itself — in exchange for a payment that is $669 higher each month. The calculator above shows this comparison for any numbers you enter, and it also prints a year-by-year amortization table so you can see how slowly the balance falls at first: in year one of the default loan, $18,108 goes to interest and only $3,130 to principal, leaving a balance of $276,870 after twelve payments.
| Term | Monthly P&I | Total interest | Total paid (P&I) |
|---|---|---|---|
| 15 years | $2,439 | $159,038 | $439,038 |
| 20 years | $2,088 | $221,120 | $501,120 |
| 30 years | $1,770 | $357,125 | $637,125 |
The 20-year row is worth a look: it saves about $136,005 of interest against the 30-year loan for $318 more a month. If the 15-year payment is too tight but the 30-year feels wasteful, the middle term is a genuine compromise. And remember that extra payments work like a shorter term — the calculator shows the payoff time and interest saved for any extra monthly amount you enter.
How Much House Can You Afford?
The classic rule is that housing should stay under 28% of gross monthly income, and all debts together under 36%. On the default payment of $2,186 a month, the 28% rule implies gross income of about $93,698 a year. That is a rule of thumb, not a lender’s decision: lenders look at credit score, debts, savings, and job history too. Still, it is a fast sanity check — if the payment needs more than a third of your gross pay, the house is probably stretching you. Try your own income in the salary calculator and compare the monthly figure with the payment here before you fall in love with a listing.
- 28% rule. Housing costs under 28% of gross monthly income.
- 36% rule. Housing plus all other debts under 36% of gross income.
- Down payment. 20% avoids PMI; less than that adds a monthly PMI charge.
- Cash reserves. Keep 3 to 6 months of payments saved after closing costs.
- Rate shopping. A 0.5% lower rate on a $280,000 loan saves roughly $91 a month.
Common Mistakes
Most wrong mortgage numbers come from the same short list of errors. Check yours against it before trusting the result.
- Forgetting taxes and insurance. Principal and interest alone can understate the real monthly bill by $400 or more.
- Ignoring PMI. A down payment under 20% usually adds private mortgage insurance until the balance reaches 80% of the home value.
- Using the list price as the loan. The loan is the price minus the down payment — a $350,000 home with $70,000 down is a $280,000 loan.
- Comparing only the monthly payment. A 30-year loan looks cheaper per month but can cost $198,086 more in interest than a 15-year loan on the same balance.
- Forgetting HOA dues. Some homes carry $200 to $500 a month in association dues on top of PITI.
- Using a rate you cannot get. Advertised rates assume excellent credit; your actual rate depends on your credit score, down payment, and loan type.
Related Tools
Related tools on this site: the main mortgage payment calculator for a quick check, the salary calculator to test the payment against your income, the tax calculator to see the tax side of homeownership, and the compound interest calculator to compare saving for a down payment against investing. For background reading, see Consumer Financial Protection Bureau.
Key Takeaways
If you remember nothing else from this page, remember these five points.
- The monthly payment is PITI — principal, interest, tax, and insurance — not just the loan. On the $350,000 example, PITI is $2,186 against $1,770 of principal and interest alone.
- The loan is the price minus the down payment: $350,000 minus $70,000 is a $280,000 loan.
- Twenty percent down avoids PMI; under 20%, PMI adds roughly $175 a month on a $280,000 loan.
- A 15-year term saves $198,086 of interest on the default loan but costs $669 more a month.
- The 28% rule: housing should stay under 28% of gross monthly income — a $2,186 payment fits about $93,698 a year.
Try It Yourself
- Enter your home price and down payment in the calculator above.
- Add your real annual tax and insurance figures, not guesses.
- Compare the 15-year and 30-year totals in the comparison table.
- Check the payment against your monthly income using the 28% rule.
Quick Reminders
- Always compare the full monthly total, including escrow — never principal and interest alone.
- Get a real insurance quote before relying on the total.
- Keep 3 to 6 months of payments in reserve after closing.
- Shop at least three lenders — a 0.5% lower rate saves about $91 a month on a $280,000 loan.
Run your own numbers in the calculator at the top of the page, and confirm the final figures with your lender before making an offer.
How the Rate Changes a $280,000 Loan
The default loan is $280,000 over 30 years at 6.5%. The table shows what each half-point of interest does to the monthly payment and to the total interest over the life of the loan.
| Interest rate | Monthly P&I | Total interest over 30 years |
|---|---|---|
| 5.5% | $1,590 | $292,331 |
| 6.0% | $1,679 | $324,347 |
| 6.5% | $1,770 | $357,125 |
| 7.0% | $1,863 | $390,625 |
| 7.5% | $1,958 | $424,808 |
Going from 6.5% to 7.5% adds only $188 a month, but it adds $67,683 of total interest. Totals use the unrounded monthly payment, so multiplying the rounded figure may differ by a few dollars.
Frequently Asked Questions
What is a good mortgage rate in 2026?
A good rate depends on your credit score, down payment, loan type, and the market that week. As a rough guide, borrowers with strong credit and 20% down usually get rates near the market average, while weaker credit can add a full percentage point or more. Always compare at least three lenders on the same day, because rates move daily.
How is the monthly mortgage payment calculated?
Principal and interest come from the amortization formula M = P × r(1+r)^n ÷ ((1+r)^n − 1), where P is the loan, r is the monthly rate, and n is the number of payments. Property tax and insurance are then added monthly — annual tax divided by 12 and annual insurance divided by 12 — plus PMI if the down payment is under 20% and any HOA dues.
How much is the payment on a $350,000 house?
With $70,000 down, a $280,000 loan at 6.5% for 30 years costs $1,770 a month in principal and interest. Adding $3,500 a year of tax ($292 a month) and $1,500 a year of insurance ($125 a month) brings the total to $2,186 a month. Your own tax and insurance figures will change the total.
Does a bigger down payment lower the payment?
Yes, twice over: it shrinks the loan, which lowers principal and interest, and reaching 20% removes PMI entirely. On a $350,000 home, raising the down payment from 10% to 20% cuts the loan from $315,000 to $280,000 and drops the PMI charge.
Should I choose a 15-year or 30-year mortgage?
A 15-year loan saves a large amount of interest — $198,086 on the $280,000 example at 6.5% — but the payment is $669 higher each month. Choose 15 years only if the higher payment still leaves room for savings and emergencies. A 30-year loan with extra payments when you can afford them gives similar savings with more flexibility.
What is PITI?
PITI stands for principal, interest, taxes, and insurance — the four parts of a typical monthly mortgage payment. Lenders collect the tax and insurance parts into escrow and pay those bills for you. PMI and HOA dues are separate charges that sit on top of PITI.
How do I use the mortgage payment calculator?
Enter the home price, down payment, rate, and term, then add annual tax, insurance, and HOA dues. The calculator shows the total monthly payment with a breakdown of each part, a 15-year vs 30-year comparison, and a year-by-year amortization table.
What is included in the total monthly payment?
Principal and interest, property tax, home insurance, PMI when the down payment is under 20%, and HOA dues. On the default example those add up to $2,186 a month — $1,770 of principal and interest plus $417 of tax and insurance.
Disclaimer: This calculator gives estimates only and is not financial advice. Mortgage rates, taxes, insurance, and lender rules vary by location and credit profile. Confirm every figure with your lender before making a decision.