Mortgage Calculator

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How to calculate a monthly payment using our mortgage calculator

You only need eight pieces of information to calculate your mortgage payment with our mortgage calculator:

Home price. Enter the purchase price for a home you’re interested in buying, or play around with a range of prices to see how they affect your monthly mortgage payment.
Loan term. Your loan term is the number of years it takes to pay off your mortgage. Choose a 30-year fixed-rate term for the lowest payment. A 15-year term will save you thousands (if not hundreds of thousands) of dollars in interest charges, but the monthly payment will be much higher.
Down payment. A down payment is upfront money you pay to buy a home — conventional loans require at least a 3% down payment. If you pay less than 20%, however, you’ll also have to pay private mortgage insurance (PMI). PMI protects your lender if they have to foreclose on your home because you stop making payments. Our calculator will automatically estimate your PMI amount based on your down payment. However, you can also uncheck the box next to “Include PMI” in the advanced options to see your payment amount without mortgage insurance included.
Start date. This is the date you’ll start making payments. The calculator defaults to today’s date unless you enter a different one.
Home insurance. Lenders require you to carry homeowners insurance to repair or replace your home from a fire, theft or other loss. Although our calculator automatically generates a premium based on your home price, rates may vary based on different factors.
Mortgage rate. Check today’s mortgage rates for the most accurate number. Otherwise, the calculator reflects the most commonly offered rates.
Property taxes. Our calculator assumes a property tax rate equal to 1.25% of your home’s value, but actual property tax rates vary based on your location. Contact your local county assessor’s office to get the exact figure for a more precise monthly payment estimate.
HOA fees. If you’re buying in a neighborhood governed by a homeowners association (HOA), add the monthly fee amount here.

Mortgage payment formula

If you’re an old-school math whiz, here’s the formula embedded in the mortgage calculator:

A = P[r (1+r)n]/[(1+r)n-1]

A = Payment amount per period
P = Initial principal balance (loan amount)
r = Interest rate per period
n = Total number of payments or periods

What’s included in your monthly mortgage payment

The mortgage calculator generates a payment estimate that includes principal, interest, taxes and insurance payment — also known as a PITI payment. These four key components help you estimate the total cost of homeownership. Here’s a breakdown of each:

1. Principal

Your mortgage principal represents how much you’ll pay each month toward your loan balance.

2. Interest

The interest shown on your mortgage is how much you’ll pay in interest charges each month, which are the costs associated with borrowing money.

3. Property Taxes

The calculator divides your annual property tax bill by 12 to calculate this monthly amount.

4. Homeowners Insurance

Your annual homeowners insurance premium is divided by 12 to calculate this monthly amount that is added to your payment.

Why your fixed-rate mortgage payment might go up

Even if you have a fixed-rate mortgage, there are some scenarios that could result in a higher payment:

Property tax increases. Local and state governments may reassess the tax rate to pay for a variety of neighborhood needs, and a higher tax bill will increase your overall payment. Think the increase is unjustified? Check your local treasury or county tax assessors office to see if you’re eligible for a homestead exemption, which reduces your assessed value to keep your taxes affordable.
Higher homeowners insurance premiums. Like any type of insurance product, homeowners insurance can, and often does, rise with time. Compare homeowners insurance companies if you’re not happy with the renewal rate you’re offered each year.

How this calculator helps guide your mortgage decisions

There are a lot of important money choices to make when you buy a home. A mortgage calculator can help you decide if you should:

Make a larger down payment to get a lower monthly payment. The more you put down, the less you’ll pay each month.
Pay extra to avoid or reduce your monthly mortgage insurance premium. PMI premiums are based on your loan-to-value (LTV) ratio, which measures how much of your home’s value is borrowed. A lower LTV ratio results in a lower mortgage insurance premium. And don’t forget, you can skip PMI with at least a 20% down payment.
Choose a shorter term to build equity faster. If your budget can handle the higher monthly payments, your home equity — the difference between your loan balance and home value — will grow more quickly.
Skip a neighborhood with pricey HOA fees. Those HOA amenities may not be worth it if they put too much strain on your monthly budget.
Rethink your housing needs if the payment is higher than expected. Don’t bite off more housing expenses than your budget can chew. Do you really need that fourth bedroom, or could you make it work with three? Is there a neighborhood with lower property taxes nearby? Could you budget an extra 15 minutes in commuter traffic to live further away and save an extra $150 on your monthly mortgage payment?
Track how much equity you’ll build over time. Each mortgage payment chips away at your loan balance. If you look at an amortization schedule, you’ll notice at first you pay more interest than principal. As your loan balance drops, you’ll pay more toward principal and less toward interest until your loan is paid in full.

Think a shorter term will work for you? See 15-year mortgage rates

How much house can I afford?

You can use a mortgage payment calculator to help manage your budget and see how a mortgage payment will impact your overall finances. You can use the results to:

Determine your debt-to-income (DTI) ratio. Lenders calculate your DTI ratio by dividing your total monthly debt — including your new mortgage payment — by your pretax income. The Consumer Financial Protection Bureau (CFPB) recommends keeping your DTI ratio at 43% or less. However, some loan programs allow up to a 50% DTI ratio if you have excellent credit and extra savings. Here’s an example:

Your total monthly debt is $650 and your pretax income is $5,000 per month. You’re considering a mortgage that has a $1,500 monthly payment.

→ This puts your DTI ratio at 43%, because ($1500 + $650) ÷ $5,000 = 43%.

Analyze your cash flow budget with a house payment. It’s important to plug your mortgage payment into your budget for two reasons:

Lenders don’t consider all of your expenses. A mortgage loan application doesn’t require information about car insurance, dance classes, sports fees, entertainment costs, groceries and other expenses that are part of your family’s lifestyle. You may need to cut back on some non-housing expenses — or choose a cheaper home — if your new mortgage payment leaves you without a cash cushion.
Your take-home pay is less than the income lenders use to qualify you. Lenders may look at your before-tax income for a mortgage, but you live off what you take home after all of your paycheck deductions. Make sure there’s wiggle room in your cash flow once you subtract your new mortgage payment from your take-home pay.

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How to lower your estimated mortgage payment in the home loan calculator

Try one or all of the following tips to reduce your monthly payment:

→ Choose the longest term possible. A 30-year fixed-rate loan will give you the lowest monthly payment when compared to shorter-term loans.
→ Make a bigger down payment. Your principal and interest payments will drop with a smaller loan amount, and you’ll reduce your PMI premium. With a 20% down payment, you’ll eliminate the need for PMI altogether.
→ Consider an adjustable-rate mortgage (ARM). If you only plan to live in your home for a few years, ask about an ARM loan. The initial rate is typically lower than fixed rates for a set time period; once the teaser rate period ends, the rate adjusts based on the ARM term you choose.
→ Shop for the best rate possible. LendingTree data show that comparing quotes from three to five lenders can save you big on your monthly payments and interest charges over your loan term.

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