Mortgage Payment Calculator
Calculate your estimated monthly mortgage payments, including principal, interest, taxes, and insurance (PITI). Use this tool to determine affordability before buying a home.
Please enter valid positive numbers for all fields.
Estimated Monthly Payment
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Payment Breakdown
Principal & Interest:
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Property Tax:
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Homeowner's Insurance:
$0.00
HOA Fees:
$0.00
Loan Summary:
Loan Amount: $0
Total Interest Paid (Over Full Term): $0
Total Cost of Loan: $0
Loan Amount: $0
Total Interest Paid (Over Full Term): $0
Total Cost of Loan: $0
Understanding Your Mortgage Calculation
When planning to purchase a home, understanding the components of your monthly mortgage payment is crucial for financial stability. This mortgage calculator provides a comprehensive breakdown of PITI (Principal, Interest, Taxes, and Insurance) to give you a realistic view of your monthly housing obligations.
Components of a Mortgage Payment
- Principal: The portion of your payment that goes toward paying down the original amount you borrowed. As the years pass, a larger portion of your payment goes toward principal.
- Interest: The cost of borrowing money paid to the lender. In the early years of a 30-year fixed-rate mortgage, the majority of your payment goes toward interest.
- Property Taxes: Taxes assessed by your local government based on the value of your property. These are often collected by the lender in an escrow account and paid annually on your behalf.
- Homeowners Insurance: Protects your home against damages. Like taxes, this is often bundled into your monthly payment via escrow.
How Interest Rates Affect Affordability
Even a small change in interest rates can significantly impact your monthly payment and the total interest paid over the life of the loan. For example, on a $300,000 loan, a 1% increase in interest rate can increase your monthly payment by hundreds of dollars and your total interest cost by tens of thousands.
Principal vs. Interest Over Time
Mortgage amortization is the process of paying off a debt over time in regular installments. While your total monthly principal and interest payment remains constant with a fixed-rate mortgage, the allocation changes. At the beginning of your loan term, interest makes up the bulk of the payment. Towards the end, most of the payment goes toward the principal balance.
Tips for Lowering Your Payment
If the calculated monthly payment is higher than your budget allows, consider the following strategies:
- Increase your Down Payment: Putting more money down reduces the principal loan amount, thereby lowering monthly payments and potentially avoiding Private Mortgage Insurance (PMI).
- Shop for Lower Rates: Improve your credit score or shop around with different lenders to secure a lower interest rate.
- Extend the Loan Term: While a 30-year term has higher total interest costs than a 15-year term, the monthly payments are significantly lower.