Mortgage Calculator
Calculate your exact monthly mortgage payment and see how extra payments can save you thousands in interest and cut years off your loan. Enter the home price, down payment, interest rate, and loan term, then optionally add property tax, homeowners insurance, and a monthly extra payment.
This calculator provides estimates for general informational purposes only and does not constitute financial advice. Consult a qualified financial professional before making any financial decisions.
How It Works
A mortgage payment is made up of principal and interest (P&I), calculated with the standard EMI formula:
Monthly P&I = L × r(1+r)^n / ((1+r)^n − 1)
Where L is the loan amount (home price minus down payment), r is the monthly rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly payments.
PITI stands for Principal, Interest, Taxes, and Insurance — the four components of a full housing payment. Property tax and homeowners insurance are typically collected monthly into an escrow account and added to your P&I payment.
Worked example: $400,000 home, 10% down ($40,000), 7% rate, 30-year term.
Loan = $360,000, r = 7/12/100 = 0.005833, n = 360
Monthly P&I = 360,000 × 0.005833 × (1.005833)^360 / ((1.005833)^360 − 1) ≈ $2,395.37
With $4,800/yr tax ($400/mo) and $1,200/yr insurance ($100/mo): Total PITI ≈ $2,895.37/mo.
Extra payments: If you add $200/mo extra, every dollar goes directly to principal. This is simulated month-by-month: each month the standard interest accrues, the full payment + extra reduces principal faster, and the loan terminates early. On the example above, $200 extra saves roughly $68,000 in interest and cuts about 5 years off the loan.
Frequently Asked Questions
What does PITI mean?
PITI stands for Principal, Interest, Taxes, and Insurance. It represents the full monthly cost of homeownership beyond just the loan payment. Lenders use PITI when calculating how much house you can afford.
How do extra payments work?
Any extra amount you pay beyond the minimum goes entirely to reducing the principal balance. A lower principal means less interest accrues each month, which shortens the loan term and reduces total interest paid. Even $100/month extra can save tens of thousands of dollars.
What is PMI and when do I need it?
Private Mortgage Insurance (PMI) is required by most lenders when your down payment is less than 20% of the home price. PMI typically costs 0.5–1.5% of the loan amount per year. It can usually be cancelled once you reach 20% equity.
How much does the interest rate affect my payment?
The rate has a major impact. On a $300,000 30-year loan, going from 6% to 7% adds about $200/month and roughly $72,000 in total interest. Even 0.25% differences are worth shopping around for.
Should I choose a 15-year or 30-year mortgage?
A 15-year mortgage has higher monthly payments but far less total interest — often less than half. A 30-year loan offers lower payments and more cash flow flexibility. Making extra payments on a 30-year loan gives you the best of both: flexibility with a shorter effective payoff.