How to Use This Mortgage Calculator
Buying a home is one of the biggest financial decisions you'll make. Our free mortgage calculator helps you estimate your monthly payment so you can budget with confidence. Enter the home price, down payment, interest rate, and loan term to see your results update instantly.
What Is a Mortgage Payment Made Of? (PITI)
Your monthly mortgage payment is typically made up of four components, often called PITI, plus two optional costs:
- Principal — the portion that reduces your actual loan balance.
- Interest — what the lender charges you for borrowing the money.
- Taxes — property taxes set by your local government.
- Insurance — homeowners insurance protecting your property.
- PMI — Private Mortgage Insurance, usually required if your down payment is under 20%.
- HOA — Homeowners Association fees, if your property has them.
How Is the Monthly Payment Calculated?
The principal and interest are calculated using the standard amortization formula:
Where M is the monthly payment, P is the loan amount, r is the monthly interest rate, and n is the total number of payments. Taxes, insurance, PMI, and HOA are added on top.
How Much Down Payment Do I Need?
A 20% down payment is the classic benchmark because it lets you avoid PMI. However, many programs (FHA, VA, conventional 97) allow as little as 0–5% down. A larger down payment lowers both your loan amount and your monthly payment.
Tips to Lower Your Monthly Mortgage Payment
- Increase your down payment to reduce the principal.
- Shop multiple lenders for a lower interest rate.
- Improve your credit score before applying.
- Consider a longer term to lower monthly cost (you'll pay more interest overall).
- Buy points to reduce your rate if you'll stay long-term.
Frequently Asked Questions
Is this mortgage calculator free?
Yes. It's 100% free with no sign-up required. Calculate as many scenarios as you like.
Does it include property taxes and insurance?
Yes. You can enter your annual property tax and homeowners insurance, and we divide them into monthly amounts for an accurate estimate.
What is PMI and when do I pay it?
Private Mortgage Insurance is typically required when your down payment is less than 20% of the home price. Our calculator estimates it automatically when applicable.