Mortgage Calculator
Updated · By the CalculatorDash editorial team · How we check our maths
Quick answer
A mortgage payment is principal and interest plus property tax, homeowners insurance, any HOA dues and PMI when you put down less than 20%. On a $400,000 home with 20% down at 6.5% for 30 years, principal and interest is about $2,023 a month, and the full payment is often $2,500 or more once taxes and insurance are added.
How this calculator works
Lenders often quote only principal and interest, but most US homeowners also pay property tax and insurance through an escrow account, plus HOA dues and private mortgage insurance (PMI) if they put down less than 20%. This calculator shows the full monthly cost so you can compare it with your budget.
PMI usually ends once you reach 20–22% equity. Paying a larger down payment, or choosing a 15-year term, reduces the total interest dramatically, at the cost of a higher monthly payment.
The formula
- Loan
- home price × (1 − down payment %)
- Principal & interest
- loan × r × (1 + r)^n ÷ ((1 + r)^n − 1), with r = rate ÷ 12 and n = term × 12
- Escrow
- price × property tax % ÷ 12 + insurance ÷ 12
- PMI
- loan × PMI rate ÷ 12 when the down payment is under 20%
Worked example
A $400,000 home with 20% down leaves a $320,000 loan. At 6.5% for 30 years, principal and interest is $2,023. Property tax at 1.1% adds $367 and insurance $150, for $2,540 a month.
Tips
- 01Lenders typically want total housing costs below about 28% of gross monthly income.
- 02Compare loan estimates using the APR, which includes fees, not just the rate.
- 03One extra payment a year on a 30-year loan can shorten it by several years.
Frequently asked questions
How is a mortgage payment calculated?
Principal and interest use the standard amortisation formula. Add one-twelfth of yearly property tax and insurance, monthly HOA dues and PMI if your down payment is below 20%.
What is PMI?
Private mortgage insurance protects the lender when you put down less than 20% on a conventional loan. It is commonly about 0.3–1.5% of the loan per year and can be removed once you have enough equity.
Is a 15-year or 30-year mortgage better?
A 15-year loan has higher payments but a lower rate and far less total interest. A 30-year loan is more affordable monthly and more flexible.
How much house can I afford?
A common guideline is to keep housing costs under 28% of gross income and all debt payments under about 36%. Your lender will make the final decision.