When financing a home, the sticker price is just the beginning. Most homebuyers focus solely on the principal and interest payments, but a realistic monthly budget must include the "PITI" components: Principal, Interest, Taxes, and Insurance. Our Mortgage Calculator with PITI provides a comprehensive view of what you will actually pay every month.
What is Included in a Mortgage Payment?
Your monthly housing expense generally consists of four main parts:
Principal: The portion of your payment that reduces the loan balance. In the early years of a standard 30-year mortgage, this amount is small compared to the interest.
Interest: The cost of borrowing money. This is calculated based on your remaining loan balance and your annual percentage rate (APR).
Taxes: Property taxes assessed by your local government. Lenders often collect this monthly and hold it in an escrow account to pay the bill when it's due.
Insurance: Homeowner's insurance protects your property against damage. Like taxes, this is usually paid via escrow. If your down payment is less than 20%, you may also pay Private Mortgage Insurance (PMI).
How the Mortgage Formula Works
The standard formula used to calculate the monthly principal and interest payment is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Total monthly payment
P = Principal loan amount (Home Price minus Down Payment)
i = Monthly interest rate (Annual Rate divided by 12)
n = Number of payments (Loan term in years multiplied by 12)
Impact of Interest Rates and Loan Terms
Even a small difference 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, the difference between a 6.0% and a 7.0% interest rate is roughly $200 per month. Additionally, choosing a 15-year term over a 30-year term increases your monthly obligation but saves tens of thousands in interest over the long run.
Using This Calculator for Budgeting
To use this calculator effectively, input your estimated home price and down payment. Don't forget to include estimates for property taxes and insurance, as these can add 20-30% to your monthly bill. If you are buying a condo or a home in a managed community, include HOA fees to ensure you don't exceed your debt-to-income (DTI) ratio requirements.
function calculateMortgage() {
// 1. Get input values
var price = parseFloat(document.getElementById('homePrice').value);
var downPayment = parseFloat(document.getElementById('downPayment').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var years = parseInt(document.getElementById('loanTerm').value);
var annualTax = parseFloat(document.getElementById('propertyTax').value);
var annualInsurance = parseFloat(document.getElementById('homeInsurance').value);
var monthlyHoa = parseFloat(document.getElementById('hoaFees').value);
// 2. Validate inputs
if (isNaN(price) || isNaN(downPayment) || isNaN(rate) || isNaN(years)) {
alert("Please enter valid numbers for Price, Down Payment, Rate, and Term.");
return;
}
// Handle optional fields being empty
if (isNaN(annualTax)) annualTax = 0;
if (isNaN(annualInsurance)) annualInsurance = 0;
if (isNaN(monthlyHoa)) monthlyHoa = 0;
// 3. Perform Calculations
var principal = price – downPayment;
// Handle case where down payment >= price
if (principal <= 0) {
document.getElementById('resPrincipalInterest').innerText = "$0.00";
document.getElementById('resTax').innerText = formatCurrency(annualTax / 12);
document.getElementById('resInsurance').innerText = formatCurrency(annualInsurance / 12);
document.getElementById('resHoa').innerText = formatCurrency(monthlyHoa);
document.getElementById('resTotal').innerText = formatCurrency((annualTax / 12) + (annualInsurance / 12) + monthlyHoa);
document.getElementById('resultsSection').style.display = 'block';
return;
}
var monthlyInterestRate = rate / 100 / 12;
var numberOfPayments = years * 12;
// Mortgage Amortization Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
var monthlyPrincipalInterest = 0;
if (rate === 0) {
monthlyPrincipalInterest = principal / numberOfPayments;
} else {
var mathPower = Math.pow(1 + monthlyInterestRate, numberOfPayments);
monthlyPrincipalInterest = principal * (monthlyInterestRate * mathPower) / (mathPower – 1);
}
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
var totalMonthlyPayment = monthlyPrincipalInterest + monthlyTax + monthlyInsurance + monthlyHoa;
// 4. Update UI
document.getElementById('resPrincipalInterest').innerText = formatCurrency(monthlyPrincipalInterest);
document.getElementById('resTax').innerText = formatCurrency(monthlyTax);
document.getElementById('resInsurance').innerText = formatCurrency(monthlyInsurance);
document.getElementById('resHoa').innerText = formatCurrency(monthlyHoa);
document.getElementById('resTotal').innerText = formatCurrency(totalMonthlyPayment);
// Show results
document.getElementById('resultsSection').style.display = 'block';
}
function formatCurrency(num) {
return "$" + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}