Mortgage Calculator with Taxes and Insurance
Enter your home price, down payment, interest rate, and loan term to get your complete monthly housing payment. This calculator goes beyond principal and interest: it adds property taxes, homeowners insurance, private mortgage insurance (PMI), and HOA fees so you see the true cost of ownership every month. An amortization schedule shows exactly how each payment splits between principal and interest over the life of the loan.
What PITI means and why it matters
PITI stands for Principal, Interest, Taxes, and Insurance, the four components that make up a complete monthly mortgage payment. Lenders qualify borrowers on their full PITI payment, not just the principal and interest, which is why seeing all four numbers together is essential when you are budgeting. Most first-time buyers are surprised to find that taxes and insurance can add 15-25% on top of their base loan payment, and in high-tax states like New Jersey or Illinois they can push the total well above 30% extra. This calculator adds PMI (when applicable) and HOA fees so the number you see matches the check you will actually write each month.
How the mortgage payment formula works
The principal and interest portion uses the standard fixed-rate amortization formula: monthly payment = loan amount x (monthly rate x (1 + monthly rate)^n) / ((1 + monthly rate)^n - 1), where n is the total number of monthly payments. For a 400,000 dollar loan at 6.9% over 30 years, the monthly rate is 6.9/12/100 = 0.00575, n = 360, and the formula produces roughly 2,637/month. The rest of the payment, taxes, insurance, PMI, and HOA, is layered on top of that base figure. Property tax is calculated as the annual tax rate times the home value divided by 12. PMI applies only when your down payment is less than 20% of the purchase price and is typically 0.2%-2% of the outstanding loan balance per year.
Private mortgage insurance (PMI): what it is and how to drop it
PMI protects the lender, not the homeowner, if you default on the loan. On a conventional mortgage it is required whenever the loan-to-value ratio exceeds 80%, which means your down payment is less than 20%. Once you reach 20% equity through appreciation or paydown you can request cancellation in writing; by law (Homeowners Protection Act) the lender must automatically cancel PMI when your balance reaches 78% of the original purchase price. FHA loans carry their own version called MIP (mortgage insurance premium), which often lasts the life of the loan, making conventional financing preferable once you have 10% or more to put down. The PMI field in this calculator shows you the monthly cost so you can weigh whether a larger down payment pays off.
How extra payments cut your total cost
Because early mortgage payments are mostly interest, even a modest extra payment applied to principal each month can produce outsized savings. An extra 200 dollars per month on a 400,000 loan at 6.9% over 30 years cuts about 5.5 years off the loan and saves roughly 75,000 dollars in interest. The math works because each extra dollar of principal reduces the balance on which next month's interest is calculated, creating a compounding effect in reverse. The payoff timeline and interest saved figures in this calculator update in real time as you adjust the extra payment field.
Down payment and PMI overview
| Down payment | PMI required? | Typical PMI rate | Note |
|---|---|---|---|
| Less than 5% | Yes | 0.8%-2.0%/yr | Higher risk tier |
| 5%-9.9% | Yes | 0.5%-1.5%/yr | Standard PMI range |
| 10%-19.9% | Yes | 0.2%-0.9%/yr | PMI drops with equity |
| 20% or more | No | 0% | Avoid PMI entirely |
Conventional loan PMI requirements and typical rates by down payment level.
Frequently asked questions
What does PITI stand for?
PITI stands for Principal, Interest, Taxes, and Insurance. It is the standard industry term for the full monthly mortgage payment. Principal is the portion that reduces your loan balance, interest is the cost of borrowing, taxes refers to property taxes held in escrow, and insurance covers homeowners insurance (and PMI when applicable). Lenders use your PITI when calculating your debt-to-income ratio during underwriting.
How is PMI calculated and when does it go away?
PMI on a conventional loan is typically calculated as an annual percentage of the loan balance, usually between 0.2% and 2%, divided by 12 to get a monthly figure. The exact rate depends on your credit score, loan size, and down payment. You can request cancellation once your equity reaches 20% of the original appraised value. Under the federal Homeowners Protection Act, lenders must cancel PMI automatically when the balance drops to 78% of the original purchase price, even if you never request it.
Does this calculator handle property taxes correctly?
The calculator takes your annual property tax rate (as a percentage of home value) and divides by 12. In practice, lenders usually collect 1/12 of your annual tax bill each month and hold it in an escrow account, then pay the tax authority directly. The actual tax rate varies enormously by location: from below 0.3% in Hawaii to over 2.5% in New Jersey. Check your county assessor's website or a recent tax bill to find the precise rate for your property.
Should I include an HOA fee in my budget?
Yes. HOA fees are a fixed monthly obligation like taxes and insurance, and lenders include them in your debt-to-income ratio when you apply for a loan. Fees range from under 50 dollars per month for a small community to over 1,000 dollars per month for a high-rise with extensive amenities. Before purchasing a property with an HOA, review the fee history and the reserve fund to gauge the risk of future special assessments.
What is the difference between interest rate and APR?
The interest rate (also called the note rate or contract rate) is what the lender charges on the outstanding balance and is what this calculator uses to compute your monthly payment. APR (Annual Percentage Rate) is a broader measure that adds origination fees, mortgage broker fees, and other closing costs to the rate, then expresses the total cost of credit as a single annual figure. Use the note rate for payment calculations and APR when comparing loan offers from different lenders, since APR includes the fees.
How much does a higher interest rate increase my monthly payment?
On a 400,000 dollar loan over 30 years, a 1% increase in the interest rate raises the monthly P&I payment by roughly 220 dollars. Over 30 years that adds about 79,000 dollars in total interest. The impact is largest in the first years when more of each payment is interest. Locking in a lower rate or making extra principal payments are the two most effective levers for reducing the total cost of a mortgage.
Can I use this calculator for a 15-year mortgage?
Yes. Select 15 years from the loan term dropdown. A shorter term means higher monthly P&I payments but dramatically less total interest. For example, the same 400,000 dollar loan at 6.5% carries a monthly P&I of about 3,485 dollars on a 15-year term versus about 2,528 dollars on a 30-year term, but you pay roughly 95,000 dollars less in interest over the life of the loan. Many borrowers choose a 30-year loan but make extra payments to mimic a shorter payoff schedule while retaining flexibility.