Mortgage Calculator

The Mortgage Calculator estimates your monthly mortgage payment including principal, interest, property taxes, and homeowner's insurance. It helps you understand the true cost of buying a home and compare different loan scenarios before making one of the biggest financial decisions of your life.

A mortgage is a loan used to purchase real estate, where the property itself serves as collateral. Mortgages typically have terms of 15 or 30 years, and the interest rate can be fixed (stays the same) or adjustable (changes after an initial period). Your monthly mortgage payment is often referred to as PITI: Principal, Interest, Taxes, and Insurance.

The 28/36 rule is a common guideline for how much house you can afford. Your monthly housing costs (mortgage + taxes + insurance) should not exceed 28% of your gross monthly income, and your total debt payments should not exceed 36% of gross income.

How the Formula Works

M = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where M = monthly payment (principal + interest), P = loan principal, r = monthly interest rate, n = total number of payments.

  • P = Home price − Down payment (your loan amount)
  • r = Annual interest rate ÷ 12 ÷ 100
  • n = Loan term in years × 12 (total monthly payments)
  • Add monthly property tax, homeowner's insurance, and PMI if applicable
  • Total monthly payment = P&I + Taxes + Insurance + PMI

How to Use This Calculator

  1. Enter the home purchase price
  2. Enter your down payment amount or percentage
  3. Enter the annual interest rate and loan term
  4. Optionally add property tax rate and insurance costs
  5. View your monthly payment breakdown and total cost over the loan

Tips & Best Practices

  • Use the 28/36 rule: housing costs ≤ 28% of gross income, total debt ≤ 36%
  • A 20% down payment avoids PMI and reduces your loan amount significantly
  • Even 0.25% lower interest rate saves thousands over a 30-year mortgage
  • Consider a 15-year mortgage if you can afford the higher payment — you'll save over 50% in total interest
  • Get pre-approved before house hunting to know your exact budget
  • Factor in closing costs (typically 2–5% of home price) when budgeting

Important Limitations

  • Calculator provides estimates — actual payments depend on specific lender terms
  • Property taxes and insurance costs vary by location and are estimates
  • Does not include HOA fees, maintenance costs, or utility expenses
  • ARM calculations show only the initial fixed-rate period payments
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