How is monthly mortgage payment calculated?

Monthly mortgage payment is calculated using the loan amount, interest rate, and loan term. The formula includes principal and interest (P&I), plus taxes, insurance, and PMI if applicable.

What is PMI and when do I need it?

PMI (Private Mortgage Insurance) is required when your down payment is less than 20% of the home's value. It protects the lender if you default on the loan.

What factors affect my mortgage payment?

Your mortgage payment is affected by loan amount, interest rate, loan term, down payment, property taxes, homeowners insurance, and PMI (if applicable).

Mortgage Calculator

Calculate your monthly mortgage payment, total interest, and loan costs with US standard amortization. Get detailed payment breakdown including principal, interest, taxes, and insurance (PITI).

Loan Details

Enter your mortgage information to calculate payments

Home Price

Down Payment

Loan Amount

Interest Rate (%)

Loan Term (years)

Additional Monthly Costs

Property Tax (Annual)

Home Insurance (Annual)

PMI Rate (% annually)

HOA Fees (Monthly)

Key Features

Complete PITI calculation with taxes and insurance

Automatic PMI calculation based on LTV ratio

Detailed amortization schedule with yearly views

Flexible down payment entry ($ or %)

HOA fees and additional costs support

Understanding Mortgages

Principal: The loan amount you borrow to buy the home

Interest: The cost of borrowing money, decreases over time

Taxes: Annual property tax divided by 12 months

Insurance: Homeowner's insurance plus PMI if LTV > 80%

Loan-to-Value (LTV) Impact:

• LTV > 80%: PMI required (0.3% - 1.5% annually)

• LTV ≤ 80%: No PMI needed

• LTV ≤ 60%: Best interest rates available

Smart Mortgage Tips

20% Down Payment: Eliminates PMI and reduces monthly payment

Credit Score Matters: 740+ gets best rates, 620+ for FHA loans

15-Year vs 30-Year: 15-year saves interest, 30-year lowers payments

Rate Shopping: Compare rates within 14-45 days to minimize credit impact

Points vs Rate: Each point costs 1% of loan but reduces rate by ~0.25%

Current Market (2024-2025):

• 30-year fixed: 6.5% - 7.5%

• 15-year fixed: 6.0% - 7.0%

• 5/1 ARM: 5.5% - 6.5%

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Frequently Asked Questions

What's the difference between interest rate and APR?

Interest rate is the cost of borrowing the principal, while APR (Annual Percentage Rate) includes additional costs like origination fees, discount points, and other charges. APR gives you a more complete picture of the loan's total cost.

Should I choose a 15-year or 30-year mortgage?

15-year mortgages have higher monthly payments but lower total interest costs and faster equity building. 30-year mortgages offer lower monthly payments and more cash flow flexibility, but higher total interest costs.

When does PMI get removed automatically?

By law, PMI must be automatically removed when your loan balance reaches 78% of the original home value, provided you're current on payments. You can request removal at 80% LTV, or sooner if your home has appreciated.

How accurate are online mortgage calculators?

Online calculators provide accurate estimates for principal and interest using standard formulas. However, actual rates depend on credit score, debt-to-income ratio, market conditions, and lender-specific factors.

What credit score do I need for a good mortgage rate?

Generally, 740+ gets the best rates, 680-739 gets good rates, and 620-679 gets average rates. Below 620, you may need FHA loans or face higher rates and down payment requirements.

How much house can I afford?

Use the 28/36 rule: housing costs should be max 28% of gross income, and total debt payments should be max 36% of gross income. Consider emergency funds and other financial goals too.

What's included in PITI payments?

PITI stands for Principal, Interest, Taxes, and Insurance. This includes your loan payment plus property taxes, homeowner's insurance, and PMI if your down payment is less than 20%.

How do mortgage points work?

Each point costs 1% of your loan amount and typically reduces your interest rate by 0.25%. Points make sense if you plan to stay in the home long enough to recoup the upfront cost through lower payments.

Can I pay off my mortgage early?

Yes, making extra principal payments can save significant interest over time. Even an extra $100/month can shave years off your mortgage and save thousands in interest costs.

What is mortgage amortization?

Amortization is how your payments are split between principal and interest over time. Early payments are mostly interest, while later payments are mostly principal, but the total payment stays the same.

Important Financial Disclaimer

This mortgage calculator is for educational purposes only and should not replace professional financial advice.Actual mortgage rates, terms, and payments may vary based on your creditworthiness, debt-to-income ratio, property location, and lender policies. This calculator provides estimates only and does not guarantee loan approval or specific terms. PMI, taxes, and insurance rates vary by location and provider. Always consult with qualified mortgage professionals and compare offers from multiple lenders before making home financing decisions.