How is the monthly mortgage payment calculated?

Principal and interest use the standard amortization formula M = P · r(1+r)ⁿ / ((1+r)ⁿ − 1), where P is the loan amount (home price minus down payment), r is the monthly interest rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly payments (years × 12). When the toggle is on, monthly property tax, homeowners insurance and HOA dues are added on top, plus PMI when the down payment is under 20%.

What is PMI and when do I have to pay it?

PMI (private mortgage insurance) protects the lender when your down payment is below 20% of the home price. It is typically billed monthly as part of your mortgage payment until you reach 20% equity. This calculator assumes a typical 0.5% per year of the loan amount and adds it automatically whenever your down payment is under 20%.

Should I include property taxes and insurance in my estimate?

Yes — if you want to know what your real monthly housing cost will be. Most lenders escrow property tax and homeowners insurance into your monthly payment, and many buyers are surprised by how much they add. Toggle "Include taxes, insurance & HOA" on for a realistic full-PITI estimate.

How much should my down payment be?

20% is the common target because it avoids PMI and reduces your loan amount, lowering your monthly payment and total interest. First-time buyers often put 5–10% down with the trade-off of monthly PMI until they hit 20% equity. The right number depends on your savings, the local market, and how much monthly payment you can comfortably afford.

FINFinancial

Mortgage Calculator

Calculate your full monthly mortgage payment for a home purchase — principal and interest plus optional property tax, homeowners insurance, HOA dues, and PMI when your down payment is under 20%.

Currency

Home Price

Down Payment

Interest Rate

Loan Term

years

Include taxes, insurance & HOA

Property Tax(optional)

$/yr

Homeowners Insurance(optional)

$/yr

HOA Dues(optional)

$/mo

Try an example

Enter values above to see results

How It Works

Formula

P = \text{homePrice} - \text{downPayment}

M_{P\&I} = P \times \frac{r(1 + r)^{n}}{(1 + r)^{n} - 1}

M_{\text{PITI}} = M_{P\&I} + M_{\text{PMI}} + M_{\text{tax}} + M_{\text{ins}} + M_{\text{HOA}}

Where

$P$: Loan principal — home price minus down payment($)
$M_{P\&I}$: Monthly principal and interest payment($/mo)
$M_{\text{PITI}}$: Full monthly housing payment (principal, interest, taxes, insurance, plus PMI and HOA)($/mo)
$r$: Monthly interest rate — annual rate divided by 12 × 100
$n$: Total number of monthly payments — years × 12
$M_{\text{PMI}}$: Monthly PMI — 0.5%/year of the loan amount, applied when down payment < 20%($/mo)

The calculator takes home price minus down payment as the loan principal, then applies the standard amortization formula for principal and interest. PMI at 0.5%/year of the loan amount is added automatically whenever the down payment is under 20%. With the toggle on, monthly property tax, homeowners insurance, and HOA dues are folded in to give the full PITI monthly payment.

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