How this mortgage calculator works
Your monthly housing payment has up to five parts. Lenders often call the first four PITI — principal, interest, taxes and insurance:
- Principal and interest (P&I) — the fixed loan payment, computed with the standard amortization formula below.
- Property tax — the annual tax rate times the home price, divided by 12. The state picker fills in each state’s effective rate from the Census Bureau’s 2024 American Community Survey (median tax paid ÷ median home value). Your local rate can be quite different; your county assessor has the exact figure.
- Homeowners insurance — the annual premium divided by 12. The default is only an example; premiums vary widely by location and coverage, so use a real quote.
- Private mortgage insurance (PMI) — charged on conventional loans when you put down less than 20%. We charge the annual PMI rate on the original loan amount and stop it when the scheduled balance reaches 78% of the purchase price (or at the loan’s midpoint), which is when the Homeowners Protection Act requires automatic termination.
- HOA dues — added as entered.
The mortgage payment formula
M = P × r / (1 − (1 + r)^−n)
M = monthly principal and interest
P = loan amount (home price − down payment)
r = annual interest rate ÷ 12
n = number of monthly payments (years × 12)
Each month, interest is the balance times r, rounded to the cent. The rest of the payment reduces the balance, so early payments are mostly interest and later ones mostly principal. The final payment is adjusted by a few cents to clear the loan exactly, as servicers do. Extra payments go straight to principal, which cuts future interest and shortens the loan; the scheduled payment itself does not change.
Worked example
A $400,000 home with 10% down ($40,000), a 30-year loan at 6.5%, the U.S. average effective property tax rate of 0.89%, a $1,800 insurance premium and PMI at 0.5% a year:
| Loan amount | $360,000 |
|---|---|
| Principal & interest | $2,275.44 |
| Property tax (400,000 × 0.89% ÷ 12) | $296.67 |
| Insurance (1,800 ÷ 12) | $150.00 |
| PMI (360,000 × 0.5% ÷ 12) | $150.00 |
| Total monthly payment | $2,872.11 |
| PMI stops after | 9 years 1 month |
| Total interest over 30 years | $459,164 |
Adding $200 a month to principal pays the loan off 6 years 1 month early and saves $108,919 in interest.
How to use the results
- Compare the total, not the P&I. Taxes, insurance and PMI often add 25–40% to the loan payment, and they are what surprises first-time buyers.
- Check the PMI line. If PMI is showing, see how far a slightly bigger down payment moves you toward 20% with the PMI calculator.
- Use the schedule. The yearly table shows how much principal you pay down each year — useful for deciding when to refinance or sell. You can download the full schedule as a CSV.
- Share or save the scenario. Every input is kept in the page address, so “Copy link” reproduces these exact results.
What this calculator does not include
It assumes a fixed rate for the whole term. It does not model adjustable-rate loans, FHA or VA mortgage insurance (use the FHA loan calculator), or changes in taxes and insurance after year one. Your lender’s Loan Estimate is the authoritative figure for your loan.
Frequently asked questions
Does the calculator include PMI automatically?
Yes. If your down payment is below 20%, PMI is added at the annual rate you enter and removed when the scheduled balance reaches 78% of the purchase price, or at the loan midpoint if that comes first. Set the PMI rate to 0 to exclude it.
Why is my lender’s payment different?
Lenders use your exact property tax bill, your insurance quote, their PMI pricing and sometimes an escrow cushion. Replace the example inputs with those figures and the results should match closely.
Where do the state property tax rates come from?
They are effective rates calculated from the U.S. Census Bureau’s 2024 American Community Survey: the median real estate taxes paid in each state divided by the median value of owner-occupied homes. Local rates vary by county and city.
Do extra payments lower my monthly payment?
No. On a fixed-rate mortgage, extra principal payments shorten the loan and cut total interest, but the required monthly payment stays the same unless your lender recasts the loan.
Sources
- U.S. Census Bureau, American Community Survey 2024 1-year estimates, table B25103 (median real estate taxes paid) and table B25077 (median value, owner-occupied units)
- Freddie Mac, “Breaking down PMI,” My Home by Freddie Mac (accessed September 2026)
- Consumer Financial Protection Bureau, “When can I remove private mortgage insurance (PMI) from my loan?”
- Homeowners Protection Act of 1998, Public Law 105-216
- Freddie Mac, Primary Mortgage Market Survey (weekly average rates)