How the mortgage payment calculator works
Enter the home price, your down payment, the interest rate, and the loan term. The calculator computes the principal and interest portion of your monthly payment, then adds your estimated property tax and homeowners insurance for the full picture.
It also shows how much of each payment goes to interest versus principal over time — and how extra monthly payments can shorten the loan.
Worked example: $2,572.62 a month on a $400,000 home
Buy a $400,000 home with 20% down ($80,000) and borrow $320,000 at 6.5% for 30 years. Principal and interest come to $2,022.62 a month. Add $400 in property tax and $150 in insurance, and the true monthly cost is $2,572.62.
Notice taxes and insurance add $550 — more than a quarter of the bill. Online listings show the loan payment; this calculator shows what actually leaves your bank account.
What to watch out for
Taxes and insurance rise over time, so a payment that fits today may tighten later. Budget a cushion, and remember the first years are mostly interest — very little goes toward the principal balance.
Also compare the APR, not just the rate — it includes lender fees. Results here are estimates for planning, not a loan offer or financial advice.
Frequently asked questions
How much house can I afford?
A common guideline is the 28/36 rule: spend no more than 28% of gross income on housing and 36% on all debt. Lenders also require a down payment, closing costs, and reserves — so affordability is about cash on hand, not just the monthly payment.
Is a 15-year or 30-year mortgage better?
A 15-year loan charges far less interest and builds equity fast, but the monthly payment is much higher. A 30-year loan keeps payments manageable and leaves room in your budget. Choose based on cash flow — you can always make extra payments on a 30-year loan.
What does PITI mean?
PITI stands for principal, interest, taxes, and insurance — the four parts of a typical mortgage payment. Lenders quote all four together because that's the number that actually determines whether you can afford the home.
Do I need 20% down to buy a home?
No — many loans accept 3% to 10% down, and some programs need nothing down. The trade-off: below 20% you'll usually pay private mortgage insurance (PMI), which adds to your monthly bill until you've built enough equity to drop it.