Mortgage Payment Calculator
Your monthly mortgage payment is more than just principal and interest. This calculator helps you estimate your total monthly housing cost, including property taxes and homeowners insurance (often called PITI).
Your Estimated Monthly Payment
Payment Breakdown
How Your Monthly Mortgage Payment is Calculated (PITI Breakdown)
When using our mortgage calculator, your total monthly payment—often referred to as PITI—is made up of four key components: Principal, Interest, Taxes, and Insurance. Understanding each part can help you budget accurately and see the true cost of your home loan.
- Principal & Interest (P&I): This is the core of your mortgage payment. It is calculated using a standard amortization formula based on your loan amount, annual interest rate, and repayment term (e.g., 15 years or 30 years). The principal reduces your outstanding loan balance, while the interest is the cost of borrowing from your lender.
- Property Taxes: Your annual property tax bill is divided into 12 equal monthly installments. Property tax rates vary by location and are typically set by your local government. This amount can change over time if property values or tax rates are adjusted.
- Homeowners Insurance: This covers your home and belongings against risks like fire, theft, and natural disasters. The annual premium is divided by 12 to determine your monthly insurance cost. Rates depend on your home's value, location, and coverage level.
In most cases, mortgage lenders require borrowers to use an escrow account. With escrow, your monthly payment includes taxes and insurance in addition to principal and interest. The lender collects these amounts and pays your tax and insurance bills on your behalf, ensuring they are always paid on time.
By breaking down your PITI mortgage payment into these parts, you can better plan for the total cost of homeownership and avoid surprises in your monthly budget.