Mortgage Payment Calculator (PITI)
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Years
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Estimated Monthly Payment
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Principal & Interest:
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Property Tax (Monthly):
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Home Insurance (Monthly):
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Loan Amount:
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Total Interest Paid:
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Payoff Date:
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How to Calculate Your Mortgage Payment
Understanding your monthly mortgage obligation is a critical step in the home-buying process. While many potential homeowners focus solely on the principal and interest, the true cost of homeownership often includes property taxes and homeowners insurance, collectively known as PITI (Principal, Interest, Taxes, and Insurance).
The PITI Breakdown
This calculator provides a comprehensive view of your monthly financial commitment by breaking down the four key components:
- Principal: The portion of your payment that goes toward paying down the loan balance (the price of the home minus your down payment).
- Interest: The fee charged by the lender for borrowing money. In the early years of a standard amortization schedule, the majority of your payment goes toward interest.
- Taxes: Property taxes assessed by your local government. These are typically held in an escrow account by your lender and paid annually or semi-annually on your behalf.
- Insurance: Homeowners insurance protects your property against damage. Like taxes, this is usually bundled into your monthly payment and held in escrow.
How Interest Rates Impact Affordability
Even a small fluctuation in interest rates can significantly affect your monthly payment and the total cost of the loan. For example, on a $300,000 loan, a 1% increase in interest rate can raise your monthly payment by hundreds of dollars and cost tens of thousands more in interest over the life of a 30-year loan.
The Role of the Down Payment
Your down payment reduces the principal loan amount. A larger down payment not only lowers your monthly principal and interest payment but may also eliminate the need for Private Mortgage Insurance (PMI), which is typically required if you put down less than 20% of the home's value.
Using This Calculator
To get the most accurate estimate:
- Home Price: Enter the purchase price of the property.
- Down Payment: Input the cash amount you plan to pay upfront.
- Interest Rate: Enter the current annual percentage rate (APR) you expect to qualify for.
- Loan Term: Choose the duration of the loan, typically 15 or 30 years.
- Tax & Insurance: Estimate your annual property tax and insurance costs. You can often find tax history on real estate listing sites.
Note: This tool provides an estimate. Your actual payment may vary based on your lender, credit score, and specific escrow requirements.