Mortgage Payment Calculator

A monthly mortgage payment consists of principal and interest (P&I), calculated using an amortization formula based on your loan amount, interest rate, and loan term. Your total monthly payment also includes property taxes (typically escrowed monthly), homeowner's insurance, PMI (if your down payment is less than 20%), and HOA fees if applicable. The P&I portion stays constant on a fixed-rate mortgage, but the ratio of principal to interest shifts over time — early payments are mostly interest, while later payments are mostly principal.

A common guideline is that your total monthly housing payment (mortgage, taxes, insurance) should not exceed 28% of your gross monthly income. For example, if you earn $100,000 per year ($8,333/month), your housing payment should be under $2,333/month. Use this calculator to work backwards — adjust the home price until the total monthly payment fits within your budget. Also factor in your down payment size, other debts (the 36% total debt-to-income rule), and an emergency fund of 3-6 months of expenses.

A 15-year mortgage has higher monthly payments but saves significantly on total interest — often hundreds of thousands of dollars over the life of the loan. A 30-year mortgage has lower monthly payments, giving you more flexibility and cash flow. Choose 15 years if: you can comfortably afford the higher payment and want to build equity faster. Choose 30 years if: you want lower required payments, plan to invest the difference, or need the flexibility. Many financial advisors suggest taking the 30-year and making extra principal payments when you can — this gives you the flexibility of lower required payments with the option to pay down faster.

Private Mortgage Insurance (PMI) is required when your down payment is less than 20% of the home price. PMI protects the lender (not you) in case of default. It typically costs 0.5-1% of the loan amount annually. PMI is automatically removed once you reach 20% equity in the home (by paying down the principal or through home appreciation). You can request PMI removal from your lender once you believe you have reached 20% equity. Some loan types (like FHA) have their own mortgage insurance requirements that work differently.