How is a mortgage monthly payment calculated?

Monthly P&I uses the amortisation 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 payments. On a $300,000 loan at 7% for 30 years: monthly rate = 0.5833%, 360 payments, M ≈ $1,996/month.

What is PMI and when do I have to pay it?

PMI (Private Mortgage Insurance) is required by conventional lenders when your down payment is less than 20% of the home price. It protects the lender — not you — against default. PMI typically costs 0.5–1.5% of the loan amount annually. On a $280,000 loan at 1%, that's $233/month. PMI can be removed once you reach 20% equity.

What is a good mortgage rate right now?

In 2025, 30-year fixed mortgage rates in the US are approximately 6.5–7.5% for well-qualified buyers. 15-year rates are typically 0.5–0.75% lower. Rates vary by credit score, loan type (conventional vs FHA vs VA), down payment, and lender. Shopping 3+ lenders typically saves 0.25–0.5%, which equals tens of thousands over the loan life.

What is the mortgage calculator for California?

California has no state income tax deduction for mortgage interest (for state taxes), but property tax is relatively low at ~0.71% average (Prop 13 limits increases). For a $700,000 home (California median) at 7% with 20% down ($140,000) on a 30-year: loan = $560,000, P&I ≈ $3,725/mo, taxes ≈ $415/mo, insurance ≈ $150/mo. Total ≈ $4,290/mo.

What is the mortgage calculator for Texas?

Texas has no state income tax but has above-average property taxes, typically 1.6–2.5%. For a $350,000 Texas home at 7%, 10% down ($35,000), 30-year: loan = $315,000, P&I ≈ $2,095/mo, PMI ≈ $262/mo (< 20% down), taxes at 2% ≈ $583/mo, insurance ≈ $125/mo. Total ≈ $3,065/mo.

Should I choose a 15-year or 30-year mortgage?

A 15-year mortgage has a lower interest rate (typically 0.5–0.75% less) and builds equity twice as fast, but monthly payments are about 40–50% higher. A 30-year has lower payments, giving more cash flow flexibility. Rule of thumb: if the 15-year payment is under 28% of gross monthly income and you're otherwise financially stable, the interest savings are substantial. On a $300,000 loan at 7% vs 6.25%: 30-yr costs $418K in interest vs 15-yr at $159K.

What is an FHA mortgage and how does the calculator apply?

FHA loans allow down payments as low as 3.5% and have more flexible credit requirements. They require MIP (Mortgage Insurance Premium) instead of PMI — upfront MIP of 1.75% (typically financed into the loan) plus annual MIP of 0.55–1.05% depending on term and LTV. Use this calculator with your FHA loan amount and enter the annual MIP rate in the PMI field (the calculator applies it the same way).

How much house can I afford?

The common guideline is the 28/36 rule: your monthly housing cost (P&I + taxes + insurance + PMI) should not exceed 28% of gross monthly income, and total debt payments (including car, student loans, etc.) should not exceed 36%. At $80,000/year gross ($6,667/month), your maximum housing payment is ~$1,867/month. Use this calculator in reverse: start with a target payment and work backward to a home price.

What happens if I make extra mortgage payments?

Extra payments go entirely toward principal, shortening your loan term and reducing total interest dramatically. On a $300,000 30-year loan at 7%, paying an extra $200/month saves approximately $70,000 in interest and pays off the loan 6 years early. The earlier in the loan you start extra payments, the greater the impact.

Home/Finance/Mortgage Calculator

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Mortgage Calculator

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Annual Interest Rate

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About this tool

Monthly payment with taxes, insurance & PMI

The Mortgage Calculator breaks down your full monthly housing cost — not just principal and interest, but also property taxes, home insurance, and PMI (private mortgage insurance if your down payment is under 20%). This is the number that actually matters for your budget.

Four components make up your total monthly payment:

Principal & Interest (P&I) — the loan repayment itself, calculated using standard amortisation
Property tax — varies by state: ~0.5% in Hawaii, ~2.2% in New Jersey; the US average is ~1.1%
Home insurance — typically $1,000–$2,000/year; enter your actual quote
PMI — automatically calculated at 1%/year if your down payment is below 20%; drops off once you reach 20% equity

The amortisation table below shows how much of your original loan remains at key years, and how your equity grows over the life of the mortgage.

Example

Scenario: $400,000 home, $80,000 down (20%), 30-year fixed at 7%, 1.2% property tax, $1,200/year insurance.

Loan: $320,000. Monthly P&I = $320,000 × [0.005833 × 1.005833³⁶⁰] / [1.005833³⁶⁰ − 1] ≈ $2,129.

Property tax: $400,000 × 1.2% ÷ 12 = $400/mo. Insurance: $1,200 ÷ 12 = $100/mo. PMI: $0 (20% down).

Total monthly: $2,629. Total interest over 30 years: ~$446,000.