Use the total monthly estimate to compare home-price and down-payment scenarios. It is not a lender quote, and it does not include utilities, maintenance, repairs, or closing costs.
What the monthly estimate includes
A mortgage payment can include more than principal and interest. Property tax and homeowners insurance are often collected through an escrow account, while HOA dues may be paid separately.
When the down payment is below 20%, the calculator applies the entered annual PMI rate as a planning estimate. Actual mortgage-insurance rules and cancellation dates depend on the loan.
- Principal reduces the amount owed.
- Interest is the lender's charge for borrowing.
- Tax, insurance, HOA, and PMI are separate housing costs.
How down payment changes the result
A larger down payment lowers the amount financed and usually lowers principal-and-interest cost. Reaching 20% down may also remove the PMI estimate in this calculator.
Keep emergency reserves and closing costs separate when comparing down-payment scenarios. A lower monthly payment does not automatically make a larger down payment the best use of cash.
Important limits
The calculator models a fixed-rate, fully amortizing mortgage. It does not model adjustable rates, temporary buydowns, points, lender credits, balloon payments, or changing tax and insurance bills.
Eligibility, interest rate, APR, closing costs, and escrow requirements are determined by lenders and local rules.
How this estimate is calculated
Monthly P&I = P × [i(1 + i)^n] ÷ [(1 + i)^n − 1]P is the mortgage principal, i is the monthly interest rate, and n is the number of monthly payments. The calculator then adds monthly tax, insurance, HOA dues, and estimated PMI.
Example: a $400,000 home
For a $400,000 home with $80,000 down, a 30-year fixed mortgage at 6.5%, $4,800 in annual property tax, and $1,800 in annual homeowners insurance, principal and interest are about $2,023 per month. Tax and insurance add about $550, producing an estimated monthly total near $2,573 before utilities, maintenance, and closing costs.
Sources behind this calculation
These primary sources support the formula and help you verify rules or terms that may change.
Consumer Financial Protection Bureau — How mortgage payments are calculated↗Consumer Financial Protection Bureau — Private mortgage insurance↗