Mortgage Calculator
Monthly payment with full cost breakdown including PITI
Monthly P&I Payment
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A mortgage calculator estimates your monthly principal and interest payment based on the loan amount, interest rate, and term. Add property tax, insurance, and PMI to see your full PITI payment. Use this before applying to understand your budget and compare loan options.
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Frequently Asked Questions
How is a mortgage payment calculated?
Monthly P&I = P × [r(1+r)ⁿ] / [(1+r)ⁿ−1], where P = loan principal, r = monthly rate (annual ÷ 12), n = number of payments. This formula ensures the loan is fully paid off at the end of the term.
What is PITI?
PITI = Principal + Interest + Taxes + Insurance. It represents your total monthly housing cost. Lenders qualify you based on PITI ÷ gross monthly income (the "front-end ratio"), which should stay under 28%.
Should I choose a 15 or 30-year mortgage?
A 15-year mortgage has higher monthly payments but you pay ~50–60% less interest overall and build equity faster. A 30-year gives more monthly cash flow flexibility. At current rates, many financial advisors favor 30-year and investing the difference.
What is PMI and how do I avoid it?
PMI (Private Mortgage Insurance) is required when your down payment is less than 20%. It typically costs 0.5–1.5% of the loan amount per year. Avoid it by putting 20% down, or getting an 80-10-10 piggyback loan.
How much does a lower interest rate save?
On a $400,000 loan at 7% vs 6.5% for 30 years, you save about $70/month and ~$25,000 in total interest. Every 0.25% rate reduction saves roughly $12–15/month per $100,000 borrowed.
Monthly Payment by Rate & Price
30-year fixed, 20% down
| Price | 6.5% | 7.0% |
|---|---|---|
| $250k | $1,264 | $1,330 |
| $350k | $1,770 | $1,862 |
| $450k | $2,276 | $2,394 |
| $550k | $2,781 | $2,926 |
| $700k | $3,541 | $3,726 |
Affordability Rules
How Mortgage Payments Work
A mortgage is an amortizing loan — each monthly payment covers both interest charged on the current balance and a portion of the principal. In the early years, most of your payment goes to interest. Over time, the balance decreases and more goes to principal.
For example, on a $400,000 loan at 7% for 30 years, your first payment of $2,661 splits as: $2,333 interest + $328 principal. By year 15, it\'s roughly $1,900 interest + $761 principal. By year 29, almost all of it is principal.
15-Year vs 30-Year Mortgage Comparison
| Factor | 15-Year | 30-Year |
|---|---|---|
| Monthly payment | Higher (~40% more) | Lower |
| Total interest paid | ~55% less | Much more |
| Interest rate | Typically 0.5–0.75% lower | Standard rate |
| Equity buildup | Faster | Slower |
| Monthly cash flow | Tighter | More flexible |
| Risk if income drops | Higher (higher payment) | Lower (lower payment) |
| Best for | Low debt, stable income | Maximizing monthly cash flow |
Tips to Lower Your Mortgage Payment
Improve your credit score
A 760+ credit score gets the best rates. Each 20-point improvement can save 0.25–0.5% on your rate.
Shop multiple lenders
Getting 3–5 quotes can save an average of $1,500 in fees and a lower rate. Use the same day for accurate comparisons.
Make a larger down payment
Every additional 5% down lowers your loan balance and avoids or reduces PMI.
Buy down your rate with points
1 point costs 1% of the loan and typically lowers your rate by 0.25%. Calculate break-even before buying points.
Choose a shorter term
15-year mortgages have rates ~0.5–0.75% lower than 30-year, saving significantly on interest.
Time the market
Mortgage rates fluctuate daily. Lock when rates dip; a 0.5% difference on $400k saves ~$100/month.