Mortgage Calculator

Buying a home is the largest financial decision most people will ever make. Understanding your true monthly cost — beyond the headline interest rate — is the first step toward knowing what you can actually afford. This calculator shows your complete PITI payment (principal, interest, taxes, and insurance), lets you model extra payments, and projects the exact date your mortgage is paid off.

Enter Your Loan Details

Start by entering the home price and your down payment — either as a dollar amount or percentage. A 20% down payment is the standard benchmark because it eliminates PMI and typically qualifies you for better rates. The loan amount is calculated automatically as home price minus down payment. Enter the interest rate you've been quoted or use current market rates to estimate — you can check current 30-year and 15-year fixed-rate averages from Freddie Mac's Primary Mortgage Market Survey (PMMS), published weekly. The term choice matters enormously: a 30-year loan at 7.5% on a $320,000 balance costs approximately $607,000 in total interest over the life of the loan, while a 15-year term at the same rate costs roughly $226,000 — a $381,000 difference. The monthly payment difference is about $908 ($2,237 vs $3,145), so the shorter term requires meaningfully higher cash flow each month.

Add Taxes, Insurance, and PMI

Expand the "Taxes, Insurance & PMI" section for a complete picture of your actual monthly obligation. Property tax varies significantly by location: the national average is approximately 1.1% of assessed home value annually, but rates range from under 0.4% in Hawaii to over 2.4% in New Jersey and Illinois (U.S. Census ACS data). On a $400,000 home, that spread represents $1,600 to $9,600 per year — a $667/month swing — so using your local rate matters. Home insurance typically costs $1,000–$2,000 annually for a median-priced home, but coastal and wildfire-prone areas run significantly higher. If your down payment is below 20%, you'll pay PMI — Private Mortgage Insurance — which typically runs 0.5% to 1.5% of the original loan balance annually until your balance falls to 80% of the home's original value. The calculator shows you exactly when PMI drops off and how much you'll have paid in total.

Model Extra Monthly Payments

The "Extra Monthly Payment" field reveals the dramatic impact of paying more than the minimum. Even $200 extra per month on a $400,000 loan at 7.5% over 30 years saves over $80,000 in interest and cuts more than 6 years off the loan. The results box shows your exact savings and new payoff date. If you can afford $500 extra per month, the savings compound dramatically — you can eliminate a decade from a 30-year term while saving over $150,000 in interest. This is one of the most effective levers in personal finance because the benefit is guaranteed and risk-free.

Read the Amortization Schedule

The amortization table breaks down every monthly payment into principal (what reduces your balance) and interest (what you pay the lender). Early payments are mostly interest. On a 30-year loan at 7.5%, the first payment applies less than 25% to principal. As years pass, the ratio flips — by year 25, most of each payment is principal. The schedule makes this visible so you can see exactly when you build significant equity. The annual chart visualizes this shift: the orange (interest) bars shrink as the green (principal) bars grow.

When to Refinance

Use the Refinance Break-Even Calculator to find your break-even point — the number of months until accumulated monthly savings exceed your closing costs. Refinancing generally makes sense when you can lower your rate by at least 0.5%–1%, plan to stay in the home past the break-even point, and closing costs are reasonable. A 1% rate reduction on a $350,000 loan saves over $200 per month. If break-even is 18 months and you plan to stay 10 years, refinancing saves $24,000+ net of costs.

Common Mistakes to Avoid

Three mistakes trip up many buyers. First: forgetting PITI. Looking only at the principal-and-interest payment understates your true monthly cost. Property tax and insurance together can add 20%–35% to the base payment; PMI can add another 5%–10%. Second: comparing APR to interest rate. APR includes origination fees, points, and other lender costs — it's always higher than the interest rate and is the correct number to compare across offers. This calculator uses the interest rate because that's what determines your payment; use APR when comparing lenders. Third: ignoring prepayment penalties. Some loans charge a fee if you pay off early or make large extra payments. Always confirm with your lender before modeling aggressive extra-payment scenarios.

When your loan-to-value ratio exceeds 80% at origination, PMI appears in every row of the amortization schedule alongside principal and interest. Each month you pay the standard P&I amount plus a PMI charge equal to the annual PMI rate applied to the original loan balance, divided by 12. As the balance falls over time, the PMI charge stays flat while the interest component of each payment shrinks — the schedule makes both shifts visible at once.

Under the federal Homeowners Protection Act (HPA), you can request PMI cancellation once your balance reaches 80% of the original home value; lenders must automatically cancel it at 78%. The CFPB’s PMI cancellation guide explains your rights in detail, including the written-request procedure.

Worked example

Inputs: $300,000 home, 10% down, $270,000 loan at 7.0% for 30 years, 0.7% PMI rate. Monthly P&I: $1,796  ·  Monthly PMI: $158 ($270,000 × 0.7% ÷ 12)  ·  HPA automatic termination threshold: $234,000 (78% of the $300,000 original home value).

At these terms, the calculator shows PMI ending at month 116 (9 years 8 months into the loan), when the balance first falls below $234,000. The schedule models automatic termination at 78% of the original home value under the HPA; you can request cancellation earlier once the balance reaches 80% ($240,000 in this example). Open the amortization schedule above with those same inputs to see each month’s PMI charge and the exact row where it drops to $0 for your own scenario.

PITI refers to the four standard components of a complete mortgage payment: Principal, Interest, Taxes, and Insurance. The P&I portion — principal and interest — is the core payment that retires the loan itself. Property tax and homeowner’s insurance are typically collected in escrow and added on top; PMI is a fifth component when your down payment is below 20%.

The standard amortization formula calculates monthly P&I: M = P × [r(1+r)^n] / [(1+r)^n − 1], where M is the monthly payment, P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (term in years × 12).

Worked example

$320,000 loan at 7.0% for 30 years: r = 7.0% ÷ 12 = 0.5833%/month; n = 360 payments; M = $2,129/month.

In month 1, approximately $1,867 of that payment is interest; only $262 reduces the principal balance. By the final years the ratio inverts — the majority of each payment goes to principal. This shift is visible in both the annual chart and the amortization schedule above.

Refinancing can eliminate PMI even if you have not yet reached the 80% threshold on your existing loan — because a refinance resets the LTV calculation using a new appraisal at today’s market value rather than the original purchase price. If home prices have risen since you bought, your new LTV on the refinanced loan may be at or below 80%, making PMI unnecessary on the new loan entirely.

The refinance break-even formula is: break-even months = closing costs ÷ monthly savings. When PMI is eliminated, monthly savings equals the P&I reduction from the lower rate plus the PMI you no longer pay — both components contribute to covering closing costs faster.

Worked example

Current position: $300,000 balance at 7.5%, 30-year term, 0.7% PMI rate. Current P&I: $2,098/month; current PMI: $175/month ($300,000 × 0.7% ÷ 12); combined: $2,273/month.

New appraisal values the home at $375,000 → new LTV = $300,000 ÷ $375,000 = 80% → PMI is eliminated on the refinanced loan. New loan: $300,000 at 6.5%, 30 years → new P&I = $1,896/month; no PMI. Monthly savings: $2,273 − $1,896 = $377/month. Closing costs $5,000 → break-even = 14 months.

To verify: enter $300,000 as the current balance, $2,273 as the current monthly payment (P&I + PMI combined), 6.5% new rate, and $5,000 closing costs into the Refinance Break-Even Calculator above — it will show a 14-month break-even.