Mortgage Calculator

Why "principal and interest" is not your real payment

Ask for a mortgage quote and most lenders lead with principal and interest — the payment on the loan itself, ignoring everything else that shows up on the same bill. In reality almost every mortgage bundles two more pieces into an escrow account collected with every payment: property tax and homeowners insurance, both billed annually but divided into twelve monthly instalments so a large bill never arrives all at once. Add PMI where it applies and HOA dues where they exist, and the gap between "principal and interest" and what actually leaves your account each month can run to hundreds of dollars. PITI — principal, interest, taxes, insurance — is the number that matters for deciding what you can actually afford, and it is what this calculator shows.

If you only want the loan-payment maths on its own, or you are modelling extra payments to shorten the term, the loan payoff calculator covers that amortisation in more detail. This tool is built specifically around the full monthly bill a homeowner actually pays.

PMI: the piece most calculators get wrong

Private mortgage insurance protects the lender, not you, and it is typically required whenever the down payment is below 20% of the home price — a loan-to-value above 80%. It is usually charged as a percentage of the loan balance, split into monthly instalments, and it is easy to assume it simply runs for the life of the loan. It does not. Under the federal Homeowners Protection Act, a borrower can request cancellation once the balance is scheduled to fall to 80% of the home's original value, and the servicer must automatically terminate PMI at 78% of that same original value, provided the account is current. "Original value" is fixed at closing — the purchase price or appraised value, whichever is lower — so a rising market does not move the threshold, and a falling one does not either.

This calculator models that drop-off directly: the amortisation schedule tracks your balance every month, and PMI stops the month your balance is projected to cross 80% of the original home price. That single mechanic is why a naive principal-and-interest calculator overstates the true cost of a low-down-payment loan in its later years, and understates how much sooner the payment actually falls than most people expect.

Property tax and insurance: numbers this site will not guess

Property tax rates are set locally — by state, county and often by school district — and can differ by a wide margin between two towns twenty minutes apart. Homeowners insurance premiums vary by location, the age and construction of the home, and the coverage limits you choose. Neither figure can be responsibly reduced to one national number without misleading a real buyer about their actual payment. So this calculator asks for both directly, pre-filled with loose, clearly-labelled illustrative figures — a common national ballpark of roughly 1.1% of home value for property tax, and a rough insurance estimate — rather than a number presented as precise. Replace both with your county assessor's actual rate and a real insurance quote before treating the total here as a number to plan around.

The proactive move on PMI

Because the request threshold (80%) arrives before the automatic termination threshold (78%), a borrower who simply waits pays a few extra months of PMI that a borrower who asks does not. Once your amortisation schedule — or your servicer's own statement — shows the balance approaching 80% of what you originally paid for the home, send a written cancellation request and confirm you meet the payment-history and no-junior-lien conditions. It typically costs nothing but a letter, and the saving is exactly the PMI premium for however many months separate the two thresholds.

What this calculator does not include

• Closing costs, paid up front rather than folded into the monthly payment
• Mortgage points (discount points), an optional up-front fee some borrowers pay to buy down the rate
• An escrow cushion some lenders add on top of the raw tax and insurance figures, which can raise the actual monthly escrow collection slightly above what is shown here
• Any property-specific verification of the tax or insurance figures — they are exactly what you enter, not a rate looked up for your address