How to estimate your monthly mortgage payment
Start with the price you expect to pay and the cash you plan to put down. Enter the down payment in dollars or as a percentage. The calculator updates the other field as you type. When you change the price, it keeps the last down payment unit you edited. Property tax works the same way. If you know the annual bill, use dollars. If you have an estimate based on the purchase price, use the percentage field.
Use the interest rate from your loan quote and choose a 15-, 20-, or 30-year term. Set the first payment month to the month your first installment is due. That date can differ from your closing month. Enter your annual homeowners insurance premium and monthly HOA dues separately. If your lender gives you a monthly PMI quote, replace the automatic estimate with that figure.
How the payment and payoff date are calculated
The loan amount is the purchase price minus the down payment. For a fixed-rate loan, divide the annual interest rate by 12 to get the monthly rate, expressed as a decimal. Multiply the loan amount by that monthly rate, then divide by one minus the reciprocal of one plus the monthly rate raised to the number of payments. A zero-interest loan simply divides the loan amount by the number of months.
Each month, interest equals the opening balance times the monthly rate. The rest of the loan payment pays down principal. The annual tax and insurance figures are divided by 12 and added alongside HOA dues and any PMI. The loan balance chart and amortization table follow principal and interest. Taxes, insurance, and HOA dues are part of the housing budget and can continue after the loan is paid off.
Worked example with taxes, PMI, and HOA
On a $400,000 home with $60,000 down, the loan is $340,000. At 6.5% for 30 years, principal and interest are $2,149.03 per month. Annual taxes of $4,800 add $400 monthly. Annual insurance of $1,800 adds $150, and HOA dues add $50. Estimated monthly PMI of $141.67 brings the starting payment to $2,890.70.
With the first payment in January 2027 and no extra principal, the last payment is in December 2056. Total interest is $433,651.26. In this model, the balance reaches 78% of the purchase price after payment 75. The next payment is the first one shown without PMI.
Common mistakes when comparing loan estimates
Use the quoted interest rate in the calculator. APR includes certain borrowing costs and is useful when comparing lender offers, but using it in the payment formula changes the monthly estimate. Check whether the seller’s current tax bill reflects a special exemption or assessment. Your own bill may differ. Ask whether the insurance quote includes the coverage you need, and budget separately for maintenance and utilities.
Try an extra monthly amount you can sustain. The calculator applies it to principal and compares total interest and payoff timing against the regular schedule. Actual PMI timing can differ from this model when you pay ahead. For a covered conventional loan, automatic termination generally follows the original schedule. You may be eligible to request earlier cancellation. See the CFPB’s PMI guidance. If you plan to rent the property, use the rental property calculator to estimate operating cash flow.
Frequently asked questions
Does the monthly mortgage payment include taxes and insurance?
Yes. The starting estimate includes principal, interest, one month of property tax and insurance, HOA dues, applicable PMI, and any extra principal you entered.
What PMI rate does the calculator assume?
It estimates annual PMI at 0.5% of the original loan amount when you put less than 20% down. A lender quote can vary. Enter the quoted monthly premium to override the estimate.
When does PMI drop out of the estimate?
The model removes PMI from the next payment once the modeled balance reaches 78% of the original home price. For covered loans, actual automatic termination generally follows the original schedule and depends on being current.
Can I compare a 15-year and 30-year mortgage?
Yes. Keep the price and down payment fixed and change the term. Use the quoted rate for each term, then compare the starting payment and total interest.
How do I read the amortization table?
Each year shows its ending balance. Expand a year to see the date, payment, principal, interest, and remaining balance for each month. Payment figures in the table cover the loan itself.