Mortgage Calculator

The principal and interest portion uses the standard amortization formula. Escrow items are not part of the loan — they are added on top of it, which is why a quoted rate never tells you the whole monthly cost.

• Loan amount = purchase price − down payment
• Monthly rate r = annual rate ÷ 100 ÷ 12, number of payments n = years × 12
• Principal & interest = loan × r ÷ (1 − (1 + r)^−n); at 0% it is loan ÷ n
• Monthly PMI = loan × (PMI rate ÷ 100) ÷ 12, charged only while loan ÷ price is above 80%
• Total monthly payment = principal & interest + tax ÷ 12 + insurance ÷ 12 + HOA + PMI
• Total interest = principal & interest × n − loan

The total monthly payment is principal and interest plus one-twelfth of your annual tax and insurance, HOA, and PMI while it applies. Principal and interest is the only part fixed by the loan; the escrow items change as tax and insurance bills change.

Common mistakes and assumptions

• Comparing a quoted rate against this total — a lender's P&I figure excludes tax, insurance, HOA, and PMI.
• Leaving PMI on: this calculator charges it only while the loan is above 80% of the purchase price, and it does not model when your equity later crosses that line.
• Reading total interest as certain. It assumes you keep the loan for the full term and never pay extra or refinance.

A $420,000 house with $84,000 down (20%) on a 30-year loan at 6.5%, with $4,800 annual tax, $1,800 insurance, and no HOA.

1. 1Loan = $420,000 − $84,000 = $336,000.
2. 2Monthly rate = 6.5 ÷ 100 ÷ 12 = 0.00541667, and n = 360 payments.
3. 3Principal & interest = $336,000 × 0.00541667 ÷ (1 − 1.00541667^−360) = $2,123.75.
4. 4Escrow = $4,800 ÷ 12 + $1,800 ÷ 12 = $400 + $150 = $550.
5. 5Loan-to-value is exactly 80%, so the 0.5% PMI figure is not charged.
6. 6Total monthly payment = $2,123.75 + $550 = $2,673.75, and total interest over 30 years is $428,549.

Does this include closing costs?

No. It covers the recurring monthly payment only. Closing costs, points, and prepaid escrow deposits are one-time amounts due at signing and vary by lender and state.

When does PMI stop?

Most conventional lenders drop private mortgage insurance once the loan falls to 80% of value, and are required to cancel it at 78% on the original schedule. This calculator only charges PMI when your starting loan is above 80% of the price, and holds the amount flat.

Why is my lender's number slightly different?

Lenders round payments, may collect escrow cushions, and sometimes quote with points folded in. A few dollars of difference is normal; a large gap usually means a different rate, term, or escrow assumption.

Should I enter tax and insurance monthly or annually?

Annually. Both fields ask for the yearly amount and are divided by 12. HOA dues are the exception and are entered per month, because that is how they are billed.