Mortgage Calculator

Estimate the full monthly cost of a home loan (PITI).

How the Math Works

The Mortgage Calculator uses a standard amortization formula to compute principal and interest (P&I): P&I = L * r / (1 - (1 + r)^-n), where L is the loan amount, r is the monthly interest rate (annual rate divided by 12), and n is the total number of payments (loan term in years multiplied by 12). This formula accounts for the decreasing balance over time, ensuring each payment covers both interest and principal. Once P&I is calculated, property tax and homeowner's insurance are added by dividing their annual estimates by 12, giving you the total monthly payment.

Practical Applications

To use this calculator, enter your home's purchase price, down payment amount, loan interest rate, loan term, annual property tax, and annual insurance cost. The calculator then determines your monthly mortgage payment, helping you budget accurately and compare different loan options or locations. This is essential when house hunting or refinancing, as it reveals the true monthly cost beyond just the advertised loan terms.

Day-to-Day Use

Knowing your exact monthly mortgage payment helps you plan your household budget, ensuring you can comfortably cover all living expenses without overextending financially. It also helps you evaluate whether a particular home fits your budget, compare properties in different tax jurisdictions, and make informed decisions about adding improvements that might affect your insurance costs. By understanding the full cost upfront, you avoid unpleasant surprises and can confidently commit to homeownership.

Worked example

$300k, 6.5%, 30y, $3,600 tax, $1,200 ins → ~$2,296/mo.

FAQ