$
Enter a valid home price.
$
Enter a valid down payment.
%
Enter a valid interest rate (0–30%).
Select a loan term.
+ Taxes, Insurance & PMI (optional)
▼
$
Typical: 1–2% of home value/yr
$
Typical: $800–$2,000/yr
$
Required if down <20%
Monthly Payment (PITI)
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⚠️ Disclaimer: This calculator provides estimates for informational purposes only. Actual mortgage payments may differ based on lender fees, escrow adjustments, HOA dues, and other costs. Consult a licensed mortgage professional before making financial decisions.
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Sources & Methodology
Calculations use the standard fixed-rate mortgage amortization formula as defined by the Consumer Financial Protection Bureau (CFPB) and Freddie Mac mortgage guidelines.
Consumer Financial Protection Bureau — Loan Estimate
CFPB mortgage payment standards and PITI component definitions used as the basis for this calculator
Freddie Mac — Mortgage 101
Standard amortization and interest calculation methodology for fixed-rate mortgages
Methodology: Monthly P&I = P × [r(1+r)^n] / [(1+r)^n − 1], where P = loan amount, r = monthly rate (annual rate / 12 / 100), n = total payments (years × 12). Total monthly payment adds monthly property tax (annual / 12), monthly insurance (annual / 12), and PMI. Total interest = (monthly P&I × n) − loan principal.
⏱ Last reviewed: April 2026
How to Calculate a Monthly Mortgage Payment
A mortgage payment has up to four components, collectively called PITI: Principal, Interest, Taxes, and Insurance. The core calculation is the amortization formula, which determines how much of each payment covers interest versus reducing the loan balance.
The Amortization Formula
M = P × [r(1+r)^n] / [(1+r)^n − 1]
M = monthly principal & interest payment
P = loan principal (home price − down payment)
r = monthly interest rate (annual rate ÷ 12 ÷ 100)
n = total payments (loan term in years × 12)
Example: $320,000 loan at 7% for 30 years
r = 7 / 12 / 100 = 0.005833
n = 30 × 12 = 360
M = $320,000 × [0.005833 × (1.005833)^360] / [(1.005833)^360 − 1] = $2,129/mo
P = loan principal (home price − down payment)
r = monthly interest rate (annual rate ÷ 12 ÷ 100)
n = total payments (loan term in years × 12)
Example: $320,000 loan at 7% for 30 years
r = 7 / 12 / 100 = 0.005833
n = 30 × 12 = 360
M = $320,000 × [0.005833 × (1.005833)^360] / [(1.005833)^360 − 1] = $2,129/mo
How Amortization Works — Early vs Late Payments
In the early years, most of each payment goes toward interest. As the loan balance decreases over time, more of each payment shifts toward principal. This is called amortization. On a $320,000 30-year mortgage at 7%, the first payment might be $1,867 interest and $262 principal. By year 20, the split would be closer to $1,200 interest and $929 principal.
| Rate | $200K / 30yr | $300K / 30yr | $400K / 30yr | $300K / 15yr |
|---|---|---|---|---|
| 6.0% | $1,199 | $1,799 | $2,398 | $2,532 |
| 6.5% | $1,264 | $1,896 | $2,528 | $2,613 |
| 7.0% | $1,331 | $1,996 | $2,661 | $2,696 |
| 7.5% | $1,398 | $2,098 | $2,797 | $2,780 |
| 8.0% | $1,468 | $2,201 | $2,935 | $2,866 |
The 28/36 Rule for Affordability
Lenders typically use the 28/36 rule to evaluate mortgage affordability. Your total housing costs (PITI) should not exceed 28% of your gross monthly income, and all monthly debt payments combined should not exceed 36%. For example, on a $7,000/month gross income: max housing payment = $1,960. This guideline helps ensure you can comfortably manage the payment while meeting other financial obligations.
💡 Rate Impact Rule of Thumb: Every 1% increase in mortgage rate adds roughly $55–60 per month for every $100,000 borrowed on a 30-year loan. On a $400,000 loan, going from 6% to 7% adds about $240/month — over $86,000 in additional interest over the life of the loan.
Frequently Asked Questions
Monthly P&I = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the loan amount, r is the monthly rate (annual rate / 12), and n is total payments (years x 12). For a $300,000 30-year loan at 7%, this gives approximately $1,996 per month in principal and interest.
A typical mortgage payment includes four components (PITI): Principal (reduces loan balance), Interest (cost of borrowing), Taxes (property taxes held in escrow), and Insurance (homeowners insurance plus PMI if applicable). Many lenders collect taxes and insurance monthly and pay them on your behalf.
The 28/36 rule: housing costs (PITI) should not exceed 28% of gross monthly income, and total debts should not exceed 36%. For $6,000/month gross income, the max housing payment would be $1,680. Lenders may allow up to 43% DTI for qualified borrowers.
On a $300,000 30-year mortgage, each 1% rate increase adds roughly $170–180 per month. At 6%: ~$1,799/mo. At 7%: ~$1,996/mo. That 1% difference costs about $70,000 more in total interest over 30 years. Securing a lower rate is one of the most impactful ways to save on a mortgage.
A 15-year mortgage has higher monthly payments but far less total interest and builds equity faster. A 30-year mortgage has lower payments providing flexibility, but costs significantly more in total interest. If you can comfortably afford the 15-year payment, the long-term savings are substantial — often $100,000+ on a $300,000 loan.
PMI (Private Mortgage Insurance) is required when your down payment is less than 20%. It typically costs 0.5%–1.5% of the loan amount annually. Under the Homeowners Protection Act, you can request cancellation when LTV reaches 80%, and it must be automatically cancelled at 78% LTV based on the original payment schedule.
Principal reduces the loan balance. Interest is the cost charged by the lender on the remaining balance. Early in a mortgage, most of each payment is interest. As the balance shrinks over time, the principal portion grows — this shift is called amortization. In the final payments, almost all goes to principal.
The interest portion is generally deductible if you itemize. For loans after December 15, 2017, interest is deductible on up to $750,000 of mortgage debt. Property taxes paid through escrow may also be deductible up to the $10,000 SALT cap. Consult a tax professional for your specific situation.
Extra principal payments reduce the balance faster, which reduces interest charged on future payments. An extra $100/month on a $300,000 30-year loan at 7% can shorten the loan by about 4 years and save over $60,000 in interest. Any amount prepaid goes directly to principal reduction.
At 7% on 30 years, a $2,000 P&I payment supports roughly a $300,000 loan. Subtract estimated taxes and insurance (perhaps $400–500/month), and your P&I budget drops to $1,500–1,600, supporting about $225,000–$240,000. The specific amount varies significantly with your credit score and interest rate.
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