Understand your full monthly mortgage: principal & interest, property taxes, homeowners insurance, optional PMI, and HOA. Compare terms and rates with standard amortization math to see payment impact before you commit.
See amortization schedule
| Month | Payment | Principal | Interest | PMI | Escrow | Ending balance |
|---|
How the Calculator Works
The calculator computes your fixed monthly P&I using the industry-standard annuity formula (the same math used by Excel’s PMT function) and then adds the monthly amounts you enter for taxes, insurance, HOA, and (if applicable) PMI. That gives you a realistic “all-in” monthly picture rather than P&I alone.
The Mortgage Payment Formula (Fixed-Rate)
Monthly P&I = P × r × (1 + r)n ÷ [(1 + r)n − 1]
Where P = loan amount, r = monthly interest rate (APR ÷ 12), and n = number of monthly payments (years × 12). This is the same formula behind PMT.
What Each Line Item Means
Principal & Interest (P&I)
Principal reduces your balance; interest is the cost of borrowing. In a fixed-rate mortgage, the total P&I stays level, but the mix gradually shifts from more interest to more principal over time (see the amortization table in the calculator).
Property Taxes & Homeowners Insurance (Escrow)
Many servicers collect a portion of your annual property taxes and homeowners insurance with your mortgage payment via an escrow (a.k.a. impound) account. The servicer then pays those bills when due. Your escrow portion can change as taxes/insurance are re-estimated, so your total monthly payment may move even with a fixed rate.
HOA Dues
If the home is in a community with a homeowners association, monthly HOA dues are part of the cost of ownership. Add them to see your true monthly outlay.
Private Mortgage Insurance (PMI)
With a conventional loan and a down payment under 20%, most lenders require PMI. You can generally request PMI cancellation at 80% loan-to-value (LTV) based on the home’s original value; if your loan is current, PMI must automatically terminate at 78% under the Homeowners Protection Act (HPA). Exact requirements and timing depend on your investor/servicer and your payment history.
Step-by-Step: Using the Calculator
- Enter home price and down payment. You can switch between dollars and percent; the other field updates automatically.
- Set your interest rate and term. Compare 30-year vs. 15-year to see the trade-off between payment size and total interest.
- Add taxes, insurance, and HOA. If you escrow, these amounts make your estimate more realistic.
- Enter PMI (if under 20% down). The tool estimates borrower-paid monthly PMI and stops it when your balance is projected to reach ~80% LTV based on the original value, consistent with HPA/CFPB guidance.
Reading Your Results (With Examples)
Here’s how your monthly payment can differ with various scenarios. The examples are for illustration only—always confirm your actual numbers on a Loan Estimate from lenders you’re comparing.
| Scenario | Loan | Monthly P&I* | PMI (est.) | Taxes + Insurance (example) | Estimated Total |
|---|---|---|---|---|---|
| 20% down on $400,000, 30-yr @ 6.75% | $320,000 | ≈ $2,076 | $0 (no PMI) | $550 (e.g., $4,800 taxes + $1,800 insurance) | ≈ $2,626 |
| 10% down on $400,000, 30-yr @ 6.75%, PMI 0.5%/yr | $360,000 | ≈ $2,335 | ≈ $150 | $550 | ≈ $3,035 |
*Calculated via the standard fixed-rate mortgage formula; figures rounded to the nearest dollar for readability.
15-Year vs. 30-Year: Payment & Lifetime Interest
Shorter terms typically come with lower rates and dramatically less total interest, but higher monthly payments. This example keeps the APR constant just to highlight the math:
| Loan | Term | Monthly P&I | Total Interest (life of loan) |
|---|---|---|---|
| $320,000 | 30 years @ 6.75% | ≈ $2,076 | ≈ $427,185 |
| $320,000 | 15 years @ 6.75% | ≈ $2,832 | ≈ $189,708 |
Illustrative only; actual rates differ by term and borrower profile. Use live quotes and your Loan Estimates to compare lenders fairly.
Escrow: Why Your “Fixed” Mortgage Bill Can Change
Even if your rate never changes, your total monthly payment can go up or down when your servicer re-estimates escrow for taxes and insurance. If property taxes or premiums rise, your escrow portion rises, too. If there’s a shortfall, servicers may increase your monthly escrow to catch up. (Some loans don’t require escrow; government-backed loans usually do.)
How to Validate Your Numbers (E-A-T Checklist)
- Loan Estimate (LE): After you apply, lenders must give you a Loan Estimate that shows rate, P&I, projected payments, closing costs, and whether you’ll escrow. Use it to cross-check your assumptions.
- PMI Rights under HPA: Know when you can request cancellation (80% of original value) and when servicers must terminate automatically (78%) if you’re current.
- Escrow Basics: Understand how escrow works and why adjustments happen.
- Math Consistency: The calculator uses the standard fixed-rate formula (same as Excel’s PMT). If you’re validating in a spreadsheet, your results should match (allowing for rounding).
Methodology
- Loan type: Fixed-rate, fully amortizing conventional mortgage.
- Math: Level-payment annuity formula for P&I; monthly escrow adds taxes/insurance/HOA; PMI modeled as borrower-paid monthly on original loan amount, removed when projected balance reaches ~80% of the home’s original value (HPA/CFPB guidance).
- Rounding: Dollar amounts rounded for readability; your lender’s figures may differ slightly.
Frequently Asked Questions (FAQs)
Does the calculator include closing costs?
No. Closing costs (origination, appraisal, title, etc.) aren’t part of the monthly payment. Your Loan Estimate itemizes these so you can compare lenders.
Why did my monthly payment change if my rate is fixed?
Likely an escrow re-estimate (taxes or insurance changed) or PMI dropped off. Your P&I is fixed; your escrow and PMI pieces can change over time.
Can I avoid escrow?
Sometimes. Conventional loans may allow escrow waivers with sufficient down payment and borrower profile, but verify the trade-offs and fees. Government-backed loans generally require escrow.