Mortgage Calculator
Calculate your monthly mortgage payment, total interest, and see a payment breakdown. Includes property tax, insurance, and PMI estimates.
Required if down payment < 20%
$1866.96
Loan Summary
Payment Breakdown
Quick Answer: Monthly Mortgage Payment
For a $300,000 home with $60,000 down at 6.5% interest over 30 years, your estimated monthly payment is:
Dr. Snezana Lawrence
Mathematical Historian
15+ years experience
PhD from Yale University. Published mathematical historian ensuring precision in all calculations.
Education
PhD in Mathematical History - Yale University
Table of Contents
Understanding Your Mortgage Payment
Your monthly mortgage payment typically consists of four components, often called PITI:
Principal & Interest (P&I)
The core mortgage payment that pays down your loan balance and interest charges. Early payments are mostly interest; later payments are mostly principal.
Property Tax
Annual tax based on your home's assessed value. Rates vary by location, typically 0.5% to 2.5% of home value. Often collected in escrow.
Homeowner's Insurance
Required coverage protecting your home against damage. Average cost is $1,200-$2,000/year depending on location and home value.
PMI (Private Mortgage Insurance)
Required when down payment is less than 20%. Protects the lender if you default. Typically 0.5%-1% of loan amount annually. Can be removed at 20% equity.
How to Use This Mortgage Calculator
Our mortgage calculator helps you estimate your monthly payment and total costs. Follow these steps:
- Enter the home price - The total purchase price of the property
- Set your down payment - Enter a dollar amount or percentage (20% avoids PMI)
- Input the interest rate - Use the rate quoted by your lender
- Select loan term - Choose 15, 20, or 30 years
- Add property tax - Your annual property tax estimate
- Add insurance - Annual homeowner's insurance cost
- Include PMI if applicable - Monthly PMI if down payment is under 20%
Pro Tip: Property tax rates vary significantly by location. Check your county assessor's website for accurate rates, typically 0.5% to 2.5% of home value annually.
Mortgage Payment Formula
The monthly principal and interest payment is calculated using this formula:
M = P × [r(1+r)n] / [(1+r)n - 1]
M = Monthly payment (principal + interest)
P = Principal loan amount (home price minus down payment)
r = Monthly interest rate (annual rate divided by 12)
n = Total number of payments (loan term in years × 12)
Example: For a $240,000 loan at 6.5% over 30 years: r = 0.065/12 = 0.00542, n = 360. Monthly P&I = $1,516.87
How Much House Can You Afford?
Lenders use debt-to-income (DTI) ratios to determine how much you can borrow. The most common guidelines are:
28% Rule (Front-End DTI)
Your total housing costs (PITI) should not exceed 28% of your gross monthly income.
36% Rule (Back-End DTI)
Your total debt payments (housing + car + student loans + credit cards) should not exceed 36% of gross income.
| Annual Income | Monthly Income | Max Housing (28%) | Est. Home Price* |
|---|---|---|---|
| $50,000 | $4,167 | $1,167 | $210,000 |
| $75,000 | $6,250 | $1,750 | $315,000 |
| $100,000 | $8,333 | $2,333 | $420,000 |
| $125,000 | $10,417 | $2,917 | $525,000 |
| $150,000 | $12,500 | $3,500 | $630,000 |
| $200,000 | $16,667 | $4,667 | $840,000 |
*Estimated home price assumes 6.5% rate, 30-year term, 20% down, and average taxes/insurance.
Types of Mortgage Loans
Conventional Loans
Not backed by the government. Typically require higher credit scores (620+) and down payments (3-20%). Best rates with 20% down.
FHA Loans
Government-insured loans with lower requirements. Minimum 3.5% down with 580+ credit score. Require mortgage insurance for life of loan.
VA Loans
For veterans and active military. No down payment required, no PMI. Competitive rates and flexible credit requirements.
USDA Loans
For rural and suburban homebuyers. No down payment required. Income limits apply based on location.
Jumbo Loans
For loans exceeding conforming limits ($766,550 in most areas for 2024). Higher rates and stricter requirements.
Tips for Getting a Better Mortgage
Improve Your Credit Score
A score above 740 gets the best rates. Pay down debt and fix errors on your credit report.
Save for a Larger Down Payment
20% down eliminates PMI and may get you better rates.
Shop Multiple Lenders
Get quotes from at least 3-5 lenders. Rates can vary significantly.
Consider Points
Paying points upfront can lower your rate. 1 point = 1% of loan amount.
Choose the Right Loan Term
15-year loans have lower rates but higher payments. 30-year loans offer flexibility.
Lock Your Rate
Once you find a good rate, lock it in to protect against market increases.
Frequently Asked Questions
How is a mortgage payment calculated?
Monthly mortgage payment (P&I) uses the formula: P × [r(1+r)^n] / [(1+r)^n – 1], where P = principal loan amount, r = monthly interest rate (annual rate ÷ 12), and n = number of payments (years × 12). Taxes, insurance, and PMI are added separately.
How much house can I afford?
A common rule is the 28/36 rule: spend no more than 28% of gross monthly income on housing expenses, and no more than 36% on total debt. For example, with $6,000 monthly income, aim for housing costs under $1,680/month.
What is PMI and when is it required?
Private Mortgage Insurance (PMI) is required when your down payment is less than 20% of the home price. PMI typically costs 0.5% to 1% of the loan amount annually. It can be removed once you reach 20% equity.
Should I choose a 15-year or 30-year mortgage?
A 15-year mortgage has higher monthly payments but lower total interest. A 30-year mortgage has lower payments but costs more in interest over time. Consider your budget and long-term financial goals when deciding.
What credit score do I need for a mortgage?
Minimum scores vary by loan type: Conventional (620+), FHA (500-580 depending on down payment), VA (no minimum, but typically 620+). Higher scores (740+) get the best interest rates.
What is escrow and how does it work?
An escrow account is managed by your lender to pay property taxes and insurance. A portion of your monthly payment goes into escrow, and the lender pays these bills on your behalf when due.
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Dr. Snezana Lawrence
Mathematical Historian | PhD from Yale
Dr. Lawrence is a published mathematical historian with a PhD from Yale University. She ensures mathematical precision and accuracy in all our calculations, conversions, and academic score calculators. Her expertise spans computational mathematics and educational assessment.
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