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Use our **Mortgage Payment Calculator** to quickly estimate your monthly housing expenses, including Principal, Interest, Property Taxes, and Insurance (PITI). Simply enter the loan specifics and property details below, and click ‘Calculate’ to see a detailed breakdown of your expected payment.
Mortgage Payment Calculator
Mortgage Payment Formula
The core monthly Principal and Interest (P&I) payment is calculated using the following formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Formula Source: Investopedia – Mortgage Formula
Variable Definitions:
- M: The total monthly mortgage payment (P&I only).
- P: The Principal Loan Amount (Home Price minus Down Payment).
- i: The monthly interest rate (Annual Interest Rate divided by 12 and 100).
- n: The total number of payments (Loan Term in years multiplied by 12).
Related Calculators & Tools
To plan your home purchase comprehensively, you may need these specialized tools:
- Amortization Schedule Tool (See how **interest paid over 30 years** decreases)
- FHA Loan Payment Estimate (For **low down payment mortgage calculator** options)
- Home Affordability Tool (Calculate your **maximum mortgage payment calculator** based on DTI)
- Refinance Break-Even Calculator (Determine if a **cash-out refinance payment calculator** is worth it)
What is a Mortgage Payment?
A mortgage payment is the recurring cost you pay to a lender to repay the principal amount borrowed plus interest accrued on that amount. However, the true monthly housing expense is usually encapsulated by **PITI**, which stands for Principal, Interest, Property Taxes, and Homeowner’s Insurance. Our calculator includes all four of these components to give you a true estimate of your financial commitment.
The Principal and Interest portion represents the repayment of the loan itself and the cost of borrowing the money, respectively. The Taxes and Insurance components are typically collected by the lender into an escrow account and paid out annually on your behalf. Understanding this full picture is crucial for effective budgeting and avoiding financial surprises.
How to Calculate a Mortgage Payment (Example)
Let’s use an example to illustrate how the monthly payment is determined:
- Determine the Loan Principal ($P):
A $300,000 home price minus a $60,000 down payment results in a loan principal of $240,000. This is the **remaining mortgage principal calculator** amount.
- Calculate Monthly Rate and Payments:
An annual rate of 6.5% is 0.065. The monthly rate ($i$) is 0.065 / 12 = 0.005417. A 30-year term means $n$ (total payments) is 30 * 12 = 360.
- Calculate P&I Payment ($M):
Using the formula, the Principal and Interest payment comes out to $1,516.94 per month.
- Add Escrow Items (Taxes & Insurance):
If annual property tax is $3,600 and annual insurance is $1,200, the monthly escrow is ($3,600 + $1,200) / 12 = $400.00.
- Determine Total Monthly Payment:
The final PITI payment is $1,516.94 (P&I) + $400.00 (Escrow) = $1,916.94.
Frequently Asked Questions (FAQ)
No, Private Mortgage Insurance (PMI) is usually required when the down payment is less than 20%. Our calculator does not automatically include the PMI cost, but you can estimate it separately and add it to your total monthly payment. Use a dedicated **PMI removal calculator** to see when this payment can be dropped.
2. What is the difference between APR and Interest Rate?The Interest Rate is the cost of borrowing the principal loan amount. The Annual Percentage Rate (**APR**) is a broader measure that includes the interest rate plus other fees and charges (like points or origination fees) you pay to get the loan. The APR provides a more accurate representation of the total cost of the loan over its term.
3. How does making a bi-weekly payment affect the loan?A bi-weekly payment plan involves making half of your monthly payment every two weeks. Because there are 52 weeks in a year, you end up making 26 half-payments, which equals 13 full monthly payments annually. This extra payment significantly reduces the total interest paid and shortens the loan term. Use a **bi-weekly mortgage payment schedule** calculator to see your specific savings.