Quick answer
A mortgage payment calculator builds your full monthly payment — principal, interest, tax and insurance (PITI) — not just the loan part. A $340,000 loan at 6.75% over 30 years costs $2,205 a month in principal and interest; add $4,675 a year of tax and $1,800 of insurance on a $425,000 home and the real payment is $2,745, with $453,884 of interest over the term.
How the Mortgage Payment Calculator works, step by step
Enter the home price, down payment percentage, interest rate and term. The calculator computes the fixed principal-and-interest payment that amortises the loan to zero on schedule, then adds property tax (as a yearly dollar amount) and homeowners insurance to reach the payment you will actually make. HOA dues and mortgage insurance are added as separate lines when they apply.
Most lenders collect tax and insurance monthly into an escrow account and pay the bills for you, so the PITI figure is the cheque you write. Two parts of it move over time: tax follows your local assessment and insurance premiums have risen sharply in many states, so a payment quoted at purchase is not fixed for 30 years even on a fixed-rate loan.
Below 20% down, the calculator adds private mortgage insurance at the rate you enter — 0.5% of the loan a year by default. On this home with 10% down, the loan is $382,500, the principal-and-interest payment rises to $2,481 and PMI adds about $159 a month. PMI typically costs 0.3% to 1.5% of the loan per year, priced by credit score and loan-to-value.
Compare loans on the interest rate and fees, but budget on PITI. The gap between the two in the example — about $540 a month — is where buyers who shop on the loan payment alone get caught out, along with HOA dues and, below 20% down, PMI. The tool's breakdown chart shows each component's share of the monthly payment so the non-loan costs are visible.
The term choice is the biggest lever on total cost. The same $340,000 loan over 15 years at 6.75% costs $3,009 a month but total interest falls from $453,884 to about $201,565. In practice 15-year rates are usually lower than 30-year rates, widening the saving further. The trade is flexibility: the 30-year's lower required payment can be voluntarily overpaid, while the 15-year's higher payment is compulsory in a bad month too.
The formula
Monthly principal and interest = Loan × [r(1 + r)^n] ÷ [(1 + r)^n − 1], where r is the monthly rate (annual rate ÷ 12) and n the number of payments. PITI = principal and interest + (annual tax ÷ 12) + (annual insurance ÷ 12) + HOA + PMI, where PMI applies below 20% down.
Worked example — try it on the calculator above
Worked example: $425,000 home, $340,000 loan at 6.75%
Principal and interest on $340,000 at 6.75% over 360 payments: $2,205.23. Property tax of $4,675 a year: $389.58 a month. Insurance of $1,800 a year: $150 a month. Total PITI = $2,744.82. Over the full term, the loan part alone totals $793,884 — $453,884 of interest on top of the $340,000 borrowed, which is the real price of a 30-year term. In month one, $1,912.50 of the $2,205.23 payment is interest and only $292.73 is principal.
Frequently Asked Questions
How much of my first payment is interest?
Most of it. On the worked example, month one's interest is $340,000 × 6.75% ÷ 12 = $1,912.50 of the $2,205.23 payment — 87%. The split improves every month as the balance falls; by year 20 of a 30-year loan at this rate, roughly half the payment is principal. This front-loading is just the arithmetic of interest on a large starting balance, not a lender trick.
What is PMI and when does it apply?
Private mortgage insurance protects the lender when you put down less than 20% on a conventional loan. It typically costs 0.3% to 1.5% of the loan amount per year — about $159 a month on a $382,500 loan at 0.5%. Under the Homeowners Protection Act you can request cancellation at 80% of the original value, and it must end automatically at 78% on the original schedule.
15-year or 30-year mortgage — how big is the difference?
On $340,000 at the same 6.75%, a 15-year payment is about $3,009 but total interest falls from $453,884 to about $201,565. In practice 15-year rates are usually lower than 30-year rates, widening the saving further. The trade is flexibility: the 30-year's lower required payment can be voluntarily overpaid, while the 15-year's higher payment is compulsory in a bad month too.
Are taxes and insurance the same everywhere?
No — this is the biggest regional variable in housing cost. Effective property tax rates run from about 0.27% of value in Hawaii to about 2.23% in New Jersey, per the Tax Foundation's 2025 analysis, and insurance varies several-fold between low-risk inland areas and hurricane or wildfire zones. Always model with your actual local figures, not national averages.
Estimates, not advice. This calculator provides educational estimates based on the inputs you enter and the assumptions shown on this page. It is not financial, tax or investment advice, and it cannot see your full situation. Verify important figures against official sources, and consider a qualified professional for decisions about your own money. See our Disclaimer and Methodology.