How to Use This Mortgage Calculator
Our mortgage calculator gives you a complete picture of what your home loan will actually cost — not just the principal and interest, but also property taxes, homeowner's insurance, and a full amortization breakdown. Simply enter your home price, down payment, interest rate, and loan term to get started.
The calculator uses the standard amortization formula to compute your monthly principal and interest payment. It then adds your monthly property tax escrow (your annual tax divided by 12) and your monthly insurance escrow, giving you the true PITI payment — what you'll actually write a check for each month.
Switch to the Chart tab to see a visual breakdown of where your money goes — principal vs. interest over time. Switch to the Amortization tab to see a month-by-month schedule showing exactly how your balance decreases with every payment.
Example Scenarios
Scenario 1: First-Time Buyer, $350,000 Home
With a $350,000 home, 5% down ($17,500), a 6.9% rate, and a 30-year term, your principal and interest payment would be approximately $2,202/month. Adding $350/month in property tax and $130/month in insurance brings your total PITI to roughly $2,682/month. Over 30 years, you'd pay approximately $464,000 in total interest — nearly 1.4× the original loan amount.
Scenario 2: Move-Up Buyer, $600,000 Home, 20% Down
With a $600,000 home, 20% down ($120,000), a 6.5% rate, and a 15-year term, your monthly P&I drops to approximately $4,186/month — and you'd pay only about $273,000 in total interest versus over $600,000 on a 30-year term. The trade-off is a higher monthly obligation, but you build equity twice as fast and pay far less in interest overall.
Scenario 3: Investment Property, $250,000, 25% Down
An investment property at $250,000 with 25% down ($62,500) at 7.25% for 30 years yields a P&I payment of roughly $1,281/month. To be cash-flow positive, your rental income needs to exceed your PITI plus maintenance — typically 1% of value per year, or $2,500/month in this case — making it important to run the full numbers before purchasing.
Expert Tips to Lower Your Mortgage Cost
Shop at least 3 lenders
Even a 0.25% rate difference on a $400,000 loan saves over $20,000 in interest over 30 years. Compare banks, credit unions, and mortgage brokers.
Improve your credit score
Borrowers with 760+ credit scores get the best rates. Pay down credit card balances below 30% utilization and dispute any errors before applying.
Make bi-weekly payments
Paying half your monthly payment every two weeks results in 26 half-payments, or 13 full payments per year. This can cut 4-6 years off a 30-year mortgage.
Consider buying down your rate
Paying "points" (1% of loan amount = 1 point) upfront can lower your rate by 0.25%. Calculate your break-even: divide the cost of points by your monthly savings.
Avoid PMI with a piggyback loan
If you can't reach 20% down, an 80-10-10 loan (80% mortgage, 10% second mortgage, 10% down) may help you avoid PMI while preserving cash.
Watch your debt-to-income ratio
Keep total debts under 43% of gross income for conventional loan approval. Pay off car loans or credit cards before applying if you're close to the limit.