How is a monthly mortgage payment calculated?

The monthly principal and interest payment uses the standard amortization formula: M = P × r(1+r)^n / ((1+r)^n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments. Your full PITI payment also adds property taxes, homeowners insurance, PMI (if applicable), and any HOA dues.

PITI stands for Principal, Interest, Taxes, and Insurance — the four components of a typical monthly mortgage payment. Lenders use the total PITI amount when evaluating affordability, often capping it at 28% of your gross monthly income.

How much house can I afford?

A common rule is the 28/36 DTI rule: total housing costs should not exceed 28% of your gross monthly income, and total debt (housing + car loans + credit cards + student loans) should not exceed 36%. Use the Affordability tool on this site to estimate the maximum home price you can comfortably afford.

When does PMI drop off?

Private mortgage insurance is typically required when your down payment is less than 20%. By federal law, it automatically terminates once your loan-to-value ratio reaches 78% (i.e., you have 22% equity), and you can request cancellation at 80% LTV based on your original payment schedule.

Is it worth refinancing my mortgage?

A refinance generally makes sense when the monthly savings recoup the closing costs within the time you plan to stay in the home. A common rule of thumb is at least a 0.5%–1.0% rate drop. Use the Refinance tool on this site to compute your exact break-even point in months.

How are extra payments applied to a mortgage?

Extra monthly payments are applied directly to the loan principal, reducing the balance faster than scheduled. This shortens the loan term and saves significant interest. Even a small extra payment — for example, $100/month on a 30-year loan — can shave several years off the payoff date.

LatestMortgage & Rate News

Loading…

Fetching the latest mortgage and real estate headlines…

Calculator

Mortgage
Estimator

Home Price

Down Payment

Interest Rate

↗ 6.83% avg · Apr 2026 Freddie Mac

Loan Term

yrs

Taxes & Insurance Optional

Property Tax

Insurance / yr

HOA / month

Additional Monthly Payment Pay off early

Please enter valid values for all fields.

Summary

Your
Breakdown

Monthly Payment

—

P&I—

Tax—

Ins—

Loan Amount

—

Down Payment

—

Total Interest

—

Total Cost

—

Principal —

Interest —

Down Pmt —

AScenario A

Home Price

Down Payment

Interest Rate

Loan Term

yrs

Extra Monthly

BScenario B

Home Price

Down Payment

Interest Rate

Loan Term

yrs

Extra Monthly

	Scenario A	Scenario B
Monthly Payment	—	—
Total Interest	—	—
Total Cost	—	—
Payoff Time	—	—

Enter values to compare.

Year	Principal Paid	Interest Paid	Total Paid	Balance	Balance w/ Extra

LatestMortgage & Rate News

MortgageEstimator

YourBreakdown

Saved Scenarios

ARM Calculator

Rent vs Buy

How Much Can You Afford?

Compare Scenarios

Refinance Analyzer

Amortization Schedule

Share Feedback

Mortgage
Estimator

Your
Breakdown