What is included in a monthly mortgage payment — P&I vs PITI?

This calculator shows principal and interest (P&I) only — the part that repays the loan itself. Your actual monthly bill from your lender usually also includes property taxes and homeowner's insurance, and sometimes mortgage insurance — together called PITI. Taxes and insurance typically go into an escrow account, so expect your real monthly housing cost to be higher than the P&I figure.

How much house can I afford?

A common lender guideline is that housing costs stay around 28% of your gross monthly income, and all debts around 36% — but lenders approve loans case by case. A practical approach: use this calculator in reverse. Enter a home price and down payment, then check whether the monthly payment still fits your budget after property taxes, insurance, and your other debts.

Does a bigger down payment always help?

A bigger down payment always reduces the loan amount, which directly lowers the monthly payment and total interest — every extra $10,000 down at 6.5% for 30 years saves about $63.21 per month. What it does not change is the interest rate itself. The tradeoff is liquidity: emptying your emergency fund for a larger down payment can leave you exposed to repairs and income shocks, so balance both.

Should I choose a fixed or adjustable rate?

A fixed rate keeps the same payment for the entire term, which makes budgeting predictable. An adjustable-rate mortgage (ARM) starts with a lower rate that later moves with the market, so payments can rise or fall after the initial period. Fixed is the common choice for long-term stability; an ARM can make sense if you plan to sell or refinance before the rate adjusts.

Why do early mortgage payments go mostly toward interest?

Interest each month is charged on the remaining balance, which is largest at the start of the loan. On a $300,000 loan at 6.5%, the first month's interest is about $1,625 — most of the $1,896.20 payment — leaving only about $271 for principal. As the balance shrinks, the interest portion falls and more of each payment goes to principal. This front-loaded pattern is called amortization.

Mortgage Calculator

Estimate your full monthly mortgage payment — principal and interest plus property tax, insurance, PMI and HOA — and see exactly how much interest you'll pay over the life of the loan, year by year.

Home price ($)

Down payment ($)

Annual interest rate (%)

Loan term

Advanced options

Annual property tax ($)

Annual home insurance ($)

Monthly HOA dues ($)

Extra payment per month ($)

Gross monthly income ($)

Before taxes. Used for the debt-to-income check below.

Other monthly debts ($)

Car payments, student loans, minimum card payments, etc.

PMI drop-off

PMI is required while you owe more than 80% of the home's value.

Refinance breakeven (optional)

Already have a mortgage? Enter your current loan to see whether refinancing pays — and after how many months.

Current loan balance ($)

Current rate (%)

Years remaining

New rate offered (%)

Closing costs ($)

How your monthly payment is built

Your mortgage payment is more than principal and interest. Most lenders collect property tax and homeowners insurance with each payment and hold them in an escrow account, paying your tax and insurance bills for you. If your down payment is under 20%, you'll also pay private mortgage insurance (PMI) until you build enough equity. Add HOA dues and the number lenders quote can look very different from the principal-and-interest figure alone.

In the early years, the interest slice dominates because interest is charged on the full outstanding balance. On a typical 30-year loan, well over half of your first several years of payments goes to the lender as interest. That flips over time: as the balance shrinks, more of each fixed payment attacks principal. This is why even a modest extra monthly payment — applied entirely to principal — can shave years off the loan.

How to pay less interest over time

Three levers matter: a bigger down payment (less borrowed, and no PMI at 20%), a shorter term (a 15-year rate is usually lower and you pay far less interest overall), and extra principal payments (each one skips the interest those dollars would have accrued). Use the comparison below to see the 15-year vs 30-year tradeoff on your own numbers before you talk to a lender.

Frequently Asked Questions

What is PMI and when does it go away?

Private mortgage insurance protects the lender when your down payment is under 20%. It typically costs around 0.5% of the loan per year. On conventional loans you can request removal at 20% equity, and it must drop off automatically at 22% equity.

What is escrow?

An escrow account is where your lender holds the tax and insurance portion of your payment, then pays those bills on your behalf. That's why "PITI" (principal, interest, tax, insurance) is the number most homeowners actually pay each month.

Why is my first payment almost all interest?

Interest each month equals the monthly rate times the current balance, which is highest at the start. As the balance falls, the interest slice shrinks and the principal slice of your fixed payment grows.

Is a 15-year mortgage better than a 30-year?

A 15-year loan usually has a lower rate and dramatically less total interest, but the monthly payment is much higher. Choose the 15-year only if the payment still leaves room for savings and emergencies.

Do extra payments really make a difference?

Yes. An extra $200/month on a $320,000 loan at 6.5% can cut roughly 6 years off a 30-year term and save over $100,000 in interest. Enter an amount above to see your exact numbers.

Mortgage Calculator

How your monthly payment is built

How to pay less interest over time

Frequently Asked Questions

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