About This Tool
Buying a home is likely the biggest financial decision of your life, but the "sticker price" is just the beginning. Your monthly mortgage payment consists of four key parts, known as PITI: Principal, Interest, Taxes, and Insurance. Many first-time buyers are shocked when their actual payment is hundreds of dollars higher than the simple principal and interest calculation because of property taxes, homeowners insurance, HOA fees, and Private Mortgage Insurance (PMI). This comprehensive Mortgage Calculator does the heavy lifting for you. It provides a complete breakdown of your monthly obligation, showing exactly where every dollar goes. Unlike simple calculators, we include HOA fees and PMI logic. The tool automatically calculates PMI if your down payment is less than 20% and projects when it will drop off. We also built in a powerful "Extra Payment" feature. See how adding just $50 or $100 a month to your principal can save you tens of thousands of dollars in interest and shave years off your mortgage. Whether you're shopping for a new home or looking to refinance, this tool gives you the clear, accurate numbers you need to budget with confidence.
Understanding PITI: The 4 Pillars of Your Payment
Your monthly check to the bank covers more than just your debt. PITI stands for Principal, Interest, Taxes, and Insurance.
Principal is the portion that pays down the actual loan balance. In the early years of a 30-year mortgage, this is a tiny fraction of your payment. Interest is the fee for borrowing money. Initially, this makes up the vast majority of your payment. Taxes are property taxes collected by your local government, usually held in escrow by your lender and paid annually or semi-annually. Insurance is homeowners insurance that protects the property against damage. Like taxes, this is often bundled into your monthly payment.
In addition to PITI, you may have HOA Fees (Homeowners Association) which are typically paid separately but affect your affordability, and PMI (Private Mortgage Insurance) if you put down less than 20%.
The Magic of Extra Payments
Mortgage interest is calculated on your remaining principal balance every month. By making an extra payment applied directly to the principal, you permanently reduce the balance that interest is charged on. This creates a snowball effect.
For example, on a $300,000 loan at 6% for 30 years, with the standard payment you pay roughly $347,000 in total interest over 30 years. But if you add just $100 per month extra, you save over $58,000 in interest and pay off the loan 4 years and 3 months early.
Use the "Extra Payment" field in this calculator to see your specific savings potential. It is one of the few guaranteed returns on investment available to homeowners.
What is PMI and When Does it Go Away?
Private Mortgage Insurance (PMI) protects the lender, not you, in case you default. It is usually required if your down payment is less than 20% of the home's value. PMI costs typically range from 0.5% to 1% of the loan amount annually.
The Good News: PMI is not permanent. For conventional loans, it automatically terminates when your loan-to-value (LTV) ratio hits 78% based on the original schedule. You can also request to remove it once you reach 80% equity. This calculator estimates your monthly PMI cost so you are not caught off guard.
How the Amortization Schedule Works
Amortization is the process of paying off debt with a fixed repayment schedule in regular installments over time. While your total monthly P&I payment remains constant, the split between principal and interest changes every single month.
Month 1: Almost entirely interest. You pay very little of the debt itself. Year 15: The split becomes more even. Year 30: Almost entirely principal.
Click the "View Amortization Schedule" button to see this shift year-by-year. This visualization helps you understand why building equity takes time in the beginning of a mortgage.