How to Calculate a Mortgage Payment
Your monthly mortgage payment is more than just paying back the loan. Lenders call the full figure PITI — Principal, Interest, Taxes, and Insurance — and there's often an HOA fee on top.
The principal & interest formula
The core of the payment is the amortized principal and interest (P&I):
M = P × r × (1 + r)^n / ((1 + r)^n − 1)
- M — monthly principal & interest payment
- P — loan amount (home price minus down payment)
- r — monthly interest rate (annual rate ÷ 12 ÷ 100)
- n — total number of payments (years × 12)
A worked example
Say you buy a $350,000 home with 20% down ($70,000), leaving a $280,000 loan at 6.5% for 30 years. The monthly rate is 0.065 ÷ 12 ≈ 0.00542, over 360 payments. Plugging in gives a P&I payment of roughly $1,770/month. Add, say, $300 property tax and $100 insurance per month and your real payment is closer to $2,170.
Don't forget the extras
- Property tax — usually a yearly amount, divided by 12.
- Home insurance — also yearly, divided by 12.
- PMI — private mortgage insurance, typically required if you put down less than 20%.
- HOA — monthly homeowners-association dues, if any.
Calculate it in seconds
Instead of doing the math by hand, use our mortgage calculator. Enter the price, down payment, rate, and term (plus taxes, insurance, and HOA) to see your full monthly payment, the total interest over the life of the loan, and a year-by-year amortization schedule.
How much house can you afford?
A common guideline is the 28/36 rule: keep your housing payment under 28% of gross monthly income, and total debt payments under 36%. For a quick income or interest sanity-check, the percentage calculator helps.
FAQ
Why is so much of my early payment interest?
With amortization, interest is charged on the remaining balance, which is highest at the start. Over time the split tips toward principal — the amortization schedule shows exactly how.
Does a bigger down payment lower my payment?
Yes — it reduces the loan amount, lowers the monthly payment, and can remove PMI once you reach 20% down.
What's the difference between this and a loan calculator?
A basic loan calculator covers principal and interest; a mortgage calculator also folds in taxes, insurance, and HOA for the true monthly cost.