Quick answer
A typical US mortgage payment covers principal, interest, property taxes, and insurance (PITI). On a $400,000 home with 20 percent down, a 30-year loan at a 6.5 percent example rate runs about $2,021 per month in principal and interest alone. Enter your numbers above to see PITI, PMI if your down payment is under 20 percent, and how extra payments shorten the loan.
How to use this calculator
- Pick your currency. It defaults to US dollars.
- Enter the home price and your down payment (dollar amount or percent).
- Set the annual interest rate and loan term in years (15 or 30 are common).
- Add annual property tax and home insurance if you want a full PITI estimate.
- If your down payment is under 20 percent, enter a PMI rate or accept the suggested default.
- Optional: add an extra monthly payment to see months and interest saved.
- Read the breakdown. Principal, interest, tax, insurance, and PMI update as you type.
The formula, with worked examples
Lenders use standard amortization. Monthly principal and interest follow: M = P x [r(1+r)^n] / [(1+r)^n - 1]. P is the loan amount (price minus down payment), r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments (years x 12).
Example 1: $400,000 home, 20 percent down, 30 years at 6.5 percent (example rate). You borrow $320,000. The monthly rate is 0.065 / 12, or about 0.00542. Over 360 payments, the principal-and-interest payment is about $2,021. Over the full term you pay roughly $407,700 in interest on top of the $320,000 principal.
Example 2: same loan with an extra $200 per month. Paying $2,221 instead of $2,021 knocks about seven years off the schedule and saves roughly $108,000 in interest, because every extra dollar goes straight to principal after interest is covered. Tell your lender to apply extra payments to principal if you do this in real life.
This tool gives you a planning number. Your lender's quote will include fees, points, and local rules we cannot see from here. Mortgage rates change weekly. Freddie Mac publishes the national weekly average at freddiemac.com/pmms. Check there before you treat any rate as current.
How the term changes the cost ($320,000 loan at 6.5 percent example rate)
| Term | Monthly P+I | Total interest | Total paid on loan |
|---|---|---|---|
| 30 years | $2,021 | $407,729 | $727,729 |
| 15 years | $2,796 | $183,280 | $503,280 |
Same principal and example rate. A 15-year payment is higher each month but far less interest over time.
Frequently asked questions
What is PITI?
PITI stands for principal, interest, taxes, and insurance. Principal and interest pay down the loan. Property taxes and homeowners insurance are often collected monthly into an escrow account. Together they are the full housing payment most lenders underwrite. This calculator can show P+I alone or add tax and insurance for a PITI total.
What is PMI and when does it drop off?
Private mortgage insurance protects the lender when your down payment is under 20 percent. It is usually required until your loan balance reaches 80 percent of the home's original value, or you reach 78 percent by scheduled payments on a conventional loan. FHA loans use MIP with different rules. Budget PMI until you can request removal or refinance.
How much house can I afford on a given salary?
A common lender guideline is the 28/36 rule: spend no more than 28 percent of gross monthly income on housing (PITI) and no more than 36 percent on all debt payments combined. On $8,000 gross per month, 28 percent is $2,240 for housing. That is a ceiling, not a target. Run your own budget numbers before you borrow the maximum.
Is a 15-year mortgage always cheaper than a 30-year?
A 15-year loan almost always carries less total interest because you pay for fewer years and often get a slightly lower rate. The tradeoff is a much higher monthly payment. On the $320,000 example at 6.5 percent, the 15-year payment is about $775 more per month but saves over $224,000 in interest versus 30 years.
Do extra payments go to principal automatically?
Not always. Some servicers need you to specify that extra money applies to principal. Otherwise it might sit as a prepayment on your next bill. Log in or call and set principal-only extra payments. This calculator assumes every extra dollar reduces principal after interest.
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal. APR (annual percentage rate) includes certain fees rolled into the yearly cost, so APR is usually slightly higher than the note rate. Compare APR when shopping lenders. This tool uses the interest rate you enter, not APR.
Does this calculator include HOA fees?
No. Homeowners association dues, flood insurance, and maintenance are real costs but vary by building and neighborhood. Add your monthly HOA fee on top of the PITI figure you get here when you budget.
Formula and sources
Formula: M = P x [r(1+r)^n] / [(1+r)^n - 1]. PITI = principal + interest + monthly tax + monthly insurance + PMI.
Sources:
This is an educational estimate, not financial advice. Read our disclaimer.
Written by Raja Jahangir. Reviewed by Armghana Zeeshan. Last updated: June 30, 2026.
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