Sarah is a certified professional with 15 years of experience in underwriting residential and commercial loans. Her expertise ensures the accuracy of all financial calculations on this page.
Use this comprehensive **Mortgage Payment Calculator** to quickly estimate your monthly principal, interest, taxes, and insurance (PITI) payment. Simply enter your desired loan amount, interest rate, and term to see a detailed payment breakdown and an instant amortization projection. The taxes, insurance, and PMI fields are optional but highly recommended for an accurate estimate of your **total monthly housing cost**.
Mortgage Payment Calculator
Mortgage Payment Formula (P&I)
The standard formula used to calculate your principal and interest (P&I) payment is:
M = P [ i (1 + i)^n ] / [ (1 + i)^n – 1 ]
Formula Source: Investopedia
- **M:** Your Monthly Mortgage Payment (Principal and Interest only)
- **P:** The Principal Loan Amount (The amount borrowed)
- **i:** Your Monthly Interest Rate (Annual Rate / 12 / 100)
- **n:** Total Number of Payments (Loan Term in Years × 12)
Related Calculators
Explore our other specialized mortgage tools to help you plan your finances:
- Amortization Schedule Calculator Excel (Keyword #2)
- How much mortgage can I afford calculator (Keyword #3)
- Extra principal payment schedule calculator (Keyword #23)
- Refinance break-even point calculator (Keyword #73)
What is a Mortgage Payment?
A mortgage payment, often referred to as **PITI**, is the total monthly obligation a homeowner pays to their lender. PITI is an acronym that stands for Principal, Interest, Taxes, and Insurance. While the principal and interest components are fixed by your loan structure and rate, the taxes and insurance portions (held in an **escrow** account) can fluctuate over time.
The **Principal** portion directly reduces the amount you owe, building equity in your home. The **Interest** portion is the cost of borrowing the money. For the first several years of a standard loan, the interest makes up the majority of your payment. By understanding this breakdown, homeowners can make informed decisions about bi-weekly mortgage payment calculation (Keyword #1) or making lump sum payments.
Accurate calculation of your total mortgage payment is essential for responsible homeownership, ensuring your monthly housing costs align with your household budget. It’s the most crucial step in determining your overall mortgage affordability.
How to Calculate a Sample Mortgage Payment
Let’s use an example to calculate the P&I payment for a $200,000 loan at 6% interest for 30 years.
- Step 1: Determine Variables
The variables are P = $200,000, Annual Rate = 6%, and Term = 30 years. This means the Monthly Rate (i) is $6\% / 12 / 100 = 0.005$, and the Total Payments (n) is $30 \text{ years} \times 12 = 360 \text{ months}$.
- Step 2: Calculate the Exponent
Calculate $(1 + i)^n$, which is $(1 + 0.005)^{360} \approx 6.02257$.
- Step 3: Calculate the Numerator
The numerator is $P [ i (1 + i)^n ] = 200,000 [ 0.005 \times 6.02257 ] \approx 6,022.57$.
- Step 4: Calculate the Denominator
The denominator is $(1 + i)^n – 1 = 6.02257 – 1 = 5.02257$.
- Step 5: Final Monthly P&I Payment
Divide the numerator by the denominator: $6,022.57 / 5.02257 \approx \$1,199.10$. This is the calculated Principal and Interest portion of the monthly payment.
Frequently Asked Questions (FAQ)
Property taxes are usually reassessed annually by local government, and homeowner’s insurance premiums are typically updated annually by the insurer. If your payment includes an escrow account, your lender will adjust your total monthly payment (PITI) once per year to reflect these changes.
What is Private Mortgage Insurance (PMI) and when does it stop?PMI is a monthly insurance premium required on conventional loans where the borrower’s down payment is less than 20% of the home’s purchase price. Lenders generally must automatically cancel PMI when your loan-to-value (LTV) ratio reaches 78% of the original purchase price or appraised value, or when you successfully request cancellation at 80% LTV.
Does this calculator work for FHA or VA loans?Yes. You can use the calculator for any loan type. For **FHA loans**, you should include the required **Mortgage Insurance Premium (MIP)** in the Annual PMI/MIP field. For **VA loans**, which usually require a Funding Fee, you must first add the Funding Fee to your loan principal before calculating the monthly payment.