Principal, interest, taxes and insurance — the four parts of a typical monthly mortgage payment when taxes and insurance are paid through escrow.

Usually on conventional loans with less than 20% down. It can typically be cancelled at 80% loan-to-value and ends automatically at 78%.

Is a 15-year mortgage better?

It has a higher monthly payment but much less total interest. Choose it only if the payment still leaves room for savings and emergencies.

Does this include closing costs?

No. Closing costs are paid at purchase and are typically several percent of the loan amount; ask lenders for a Loan Estimate.

Can I use it for an adjustable-rate mortgage?

Only for the initial fixed period. Run a second scenario at a higher rate to see what the payment could become after it adjusts.

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Mortgage Calculator

Monthly home payment with principal, interest, property tax, insurance and PMI.

A mortgage payment is more than the loan repayment. Lenders and housing counsellors talk about PITI — principal, interest, taxes and insurance — because property tax and homeowners insurance are usually collected monthly into an escrow account alongside the loan payment. If your down payment is under 20% on a conventional loan, private mortgage insurance (PMI) is added too.

This mortgage calculator works out each of those pieces from the home price, down payment percentage, interest rate and term, then adds them into the monthly figure you will actually budget for. It also shows the total interest paid over the life of the loan — often the most sobering number on the page.

Rates, taxes and insurance vary widely by lender, state and property. Use the tool to compare scenarios — a bigger down payment, a 15-year term, a lower rate — before you request formal Loan Estimates from lenders.

By DailyCalc Editorial Team · Updated 2026-10-03 · 7-min read · 4 sources cited

● Mortgage calculator

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Mortgage payment formula

M = L × r(1 + r)ⁿ ÷ ((1 + r)ⁿ − 1); Total = M + tax ÷ 12 + insurance ÷ 12 + PMI

M is the standard amortising-loan payment on the loan amount L = price − down payment, at monthly rate r over n months. Property tax and insurance are annual bills spread over 12 months. PMI is estimated as an annual percentage of the loan, charged only while the down payment is below 20%. Total interest = M × n − L.

L: Loan amount: home price minus down payment.
r: Monthly interest rate: annual rate ÷ 12 ÷ 100 (6.5% → 0.0054167).
n: Number of monthly payments: years × 12 (30 years = 360).
PMI: Private mortgage insurance, typically about 0.3%–1.5% of the loan per year on conventional loans with under 20% down.

Worked example: $400,000 home, 20% down, 6.5% for 30 years

A buyer puts $80,000 down and budgets $4,800 a year property tax and $1,500 insurance:

Loan L = 400,000 − 80,000 = $320,000; r = 0.065 ÷ 12 = 0.0054167; n = 360.
(1 + r)³⁶⁰ ≈ 6.9918.
M = 320,000 × 0.0054167 × 6.9918 ÷ 5.9918 ≈ $2,022.62 principal and interest.
Tax 4,800 ÷ 12 = $400; insurance 1,500 ÷ 12 = $125; PMI $0 because the down payment is 20%.
Total monthly payment = 2,022.62 + 400 + 125 = $2,547.62.
Total interest over 30 years = 2,022.62 × 360 − 320,000 ≈ $408,142.

Result: $2,547.62 a month ($2,022.62 P&I + $400 tax + $125 insurance); about $408,142 interest over 30 years.

How to use this mortgage calculator

Start with the loan, then add the costs that ride along with it.

Step 1: Enter price and down payment

The purchase price and the percentage you will put down. 20% avoids PMI on most conventional loans.

Step 2: Enter rate and term

Use a current quote or a weekly average such as Freddie Mac's survey. Common terms are 30 and 15 years.

Step 3: Add property tax and insurance

Annual amounts from the listing, the county assessor or an insurance quote. Leave 0 if you only want principal and interest.

Step 4: Set a PMI rate

Ask lenders for a quote; 0.5% a year is a reasonable placeholder. It is ignored when your down payment is 20% or more.

Questions this answers

Use it before you shop, while you compare, and before you lock:

How much down payment?

On the same $400,000 home, 10% down at 6.5% means a $360,000 loan, $2,275.44 P&I plus about $150 PMI — roughly $403 a month more than 20% down.

15 or 30 years?

A 15-year term on $320,000 at 6.5% costs $2,787.54 a month but only about $181,758 in interest, versus about $408,142 over 30 years.

Is a lower rate worth chasing?

At 5.5% instead of 6.5%, the 30-year payment falls to $1,816.92 and lifetime interest to about $334,093 — a saving of around $74,000.

Affordability checks

Many lenders look for housing costs around 28% of gross monthly income and total debt around 36%; compare your total monthly payment with those guides.

Refinancing

Enter the remaining balance as the price with 0% down to see the new payment at a refinance rate.

Pro tips

Ways to lower the real cost of a mortgage:

Get Loan Estimates from at least three lenders on the same day — rates and fees vary more than most buyers expect.
Compare APRs, not just interest rates; APR includes most lender fees.
On conventional loans you can usually ask to cancel PMI once the balance reaches 80% of the original value, and it ends automatically at 78%.
Extra principal payments early in the loan save the most interest because interest is charged on the outstanding balance.
Budget for closing costs, maintenance and repairs on top of the monthly payment.

Common mistakes

Where mortgage budgets go wrong:

Budgeting only principal and interest

Tax and insurance added $525 a month in the example — a 26% jump over the P&I figure.

Forgetting PMI

With less than 20% down on a conventional loan, PMI is charged until enough equity builds up.

Ignoring rising costs

Property taxes and insurance premiums are reassessed, so the escrow part of the payment can rise even on a fixed-rate loan.

Stretching to the maximum approval

The amount a lender approves is not the amount you can comfortably afford. Leave room for savings and emergencies.

Sources & references

The formula, thresholds and guidance on this page were checked against these primary sources. Written and reviewed by DailyCalc Editorial Team; last updated 2026-10-03. Spotted an error? Tell us.

Disclaimer: Illustrative only — not financial advice. Actual payments depend on lender fees, escrow analysis, local tax and insurance costs, and loan type. Use official Loan Estimates when comparing offers.

FAQs

Frequently asked questions

M = L·r(1+r)ⁿ/((1+r)ⁿ−1) on the loan amount, plus monthly tax, insurance and any PMI. $320,000 at 6.5% for 30 years is $2,022.62 principal and interest.