Mortgage Calculator

What Is the Mortgage Calculator?

A mortgage's real monthly cost is rarely just principal and interest -- most homeowners also escrow property tax and homeowners insurance into the same monthly payment, and buyers with less than 20% down commonly pay private mortgage insurance (PMI) on top. This calculator builds the complete monthly payment picture rather than just the loan math alone.

How to Use This Calculator

Enter your loan amount, interest rate, term, and estimated annual property tax and insurance (check comparable local listings or your specific quote), plus monthly PMI if your down payment is under 20%.

The Formula

Worked Example

Important Notes

Practical Uses

Use this for a realistic total monthly housing cost estimate before shopping for a home. To check what you can afford in the first place, see the Mortgage Affordability Calculator.

Comparing Two Terms With the Same Loan

The term you pick changes the monthly figure far more than most buyers expect. Using the same hypothetical $300,000 loan at 6.5%, a 30-year term gives principal and interest of about $1,896 a month, while a 15-year term at the same rate gives roughly $2,613. That is about $717 more each month, but total interest drops from roughly $382,600 to roughly $170,400. In practice a 15-year loan usually carries a somewhat lower rate than a 30-year loan, which widens the gap further. Run the calculator twice, once per term, and compare the totals instead of only the monthly number.

Choosing Realistic Tax and Insurance Inputs

The two escrow inputs are where estimates most often go wrong. Property tax is usually based on the assessed value and the local rate, and a home that sells for more than the previous owner paid may be reassessed upward after purchase in some areas. Ask the county assessor's office, or a recent tax bill for a comparable house, rather than reusing the seller's current bill. For insurance, get an actual quote for the specific address, since coverage costs depend on location, age of the roof, and the coverage level. If the home is in a flood zone, flood insurance is normally a separate policy and is not captured by a single insurance figure unless you add it in yourself.

What This Calculator Does Not Include

• Homeowners association dues, which can be paid monthly or yearly and are not escrowed by most lenders.
• Maintenance and repairs, utilities, and the cost of furnishing the home.
• Closing costs paid at signing. For that, use the Closing Cost Calculator.
• Any change to your escrow payment later. Tax bills and insurance premiums can rise, so your real payment can drift upward even on a fixed-rate loan.

Common Mistakes to Avoid

• Entering the home price as the loan amount. The loan amount is the price minus your down payment.
• Entering the annual tax as a monthly amount, or the reverse. The tax and insurance fields here are annual figures that the calculator divides by 12.
• Forgetting PMI when the down payment is below 20%. Your lender's Loan Estimate will show the exact monthly figure.
• Comparing your result to an advertised payment that quotes only principal and interest.

Reading the Result Against Your Budget

Once you have a total, compare it to your take-home pay rather than gross income, and remember that lenders look at your debt-to-income ratio using gross income. A payment that qualifies on paper can still feel tight after taxes, childcare, and savings goals. Try adding a cushion of a few hundred dollars to the tax and insurance inputs to see whether the payment still feels comfortable if those costs rise.

Frequently Asked Questions