What this mortgage calculator does
This mortgage calculator turns a price, down payment, term and interest rate into the actual monthly cost of owning the home — not just the loan portion, but the full PITI: principal, interest, property taxes and homeowners insurance. Add HOA dues if your community has them, and the result is the realistic number that needs to fit your budget. Everything updates the instant you change any input, so you can compare scenarios side by side without reloading or hitting a button.
The formula behind the monthly payment
The principal-and-interest portion uses the standard amortization formula:
M = P × [r(1+r)n] ÷ [(1+r)n − 1]
where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12) and n is the number of monthly payments (years × 12). Each monthly payment is the same number, but the split between interest and principal shifts over time — early on, you pay mostly interest; late in the loan, mostly principal. The yearly summary table above shows that shift explicitly.
Why PITI matters more than P&I
If you only look at principal and interest, you'll underestimate your real housing cost by anywhere from a few hundred dollars a month to over a thousand. Property tax averages around 1.1% of home value nationally (much higher in some states), and homeowners insurance is typically $1,000 to $3,000 per year. Many lenders escrow these payments, meaning they collect them as part of your monthly bill and pay the tax assessor and insurer on your behalf. The calculator surfaces all four pieces so the number you see matches what shows up in your bank account.
15-year vs 30-year: a worked comparison
On a $320,000 loan at 6.75%, the 30-year monthly payment is about $2,075 and you'd pay roughly $427,000 in total interest. The same loan over 15 years is about $2,830 a month but only ~$189,000 in interest — over $238,000 saved. The trade-off is cash flow: the shorter term ties up more money each month. A common middle path is a 30-year mortgage with optional extra principal payments when you can afford them; you keep the flexibility of the low required payment but cut interest dramatically.
What this calculator does not include
PMI (private mortgage insurance, usually required when down payment is below 20% on a conventional loan), FHA upfront and annual mortgage insurance, closing costs, lender fees, points, and changing tax or insurance assessments are not modelled here. Use the result as a clean starting estimate, then ask a lender for a Loan Estimate document for fee-accurate numbers before committing.
Use with the rest of the toolkit
For other loans (auto, personal, student) try the loan calculator or auto loan calculator. To estimate property tax separately, the federal income tax percentage calculator covers the income side.