Mortgage Calculator
Calculate monthly payments, total interest, and payoff schedules with accurate PMI handling
Loan Details
How to Use This Mortgage Calculator
This mortgage calculator provides accurate monthly payment estimates including principal, interest, property taxes, homeowners insurance, PMI (Private Mortgage Insurance), and HOA fees. Enter your home price, down payment, interest rate, and loan term to see detailed payment breakdowns, total interest costs, and a complete amortization schedule showing exactly how your loan balance decreases over time.
Step 1: Enter Home Price and Down Payment
Input your total home purchase price and your down payment amount. The calculator automatically shows your down payment as a percentage. If you enter less than 20% down, PMI will be automatically included in your monthly payment calculation and will be removed once you reach 80% loan-to-value ratio.
Step 2: Choose Loan Term and Interest Rate
Select your loan term (10, 15, 20, 25, 30 years, or enter a custom term) and current interest rate. Shorter terms have lower interest rates but higher monthly payments. 30-year loans have lower monthly payments but significantly more total interest paid over the loan's lifetime.
Step 3: Add Property Costs (Optional)
Include annual property taxes and homeowners insurance for a complete monthly payment estimate. Add HOA fees if applicable. These costs vary significantly by location - check your local property tax rates and insurance quotes for accurate estimates.
Step 4: Plan Extra Payments
Enter any extra monthly payment amount to see dramatic interest savings and faster payoff times. Extra payments go directly to principal, reducing your balance faster. Even an extra $100-200 per month can save tens of thousands in interest and shave years off your mortgage.
Step 5: Review Amortization Schedule
Check the "Show Amortization Schedule" box to see month-by-month breakdown of principal, interest, and remaining balance. Jump to different years to see how your payment composition changes over time - early payments are mostly interest, while later payments are mostly principal.
Understanding PMI (Private Mortgage Insurance)
Private Mortgage Insurance (PMI) is required by lenders when your down payment is less than 20% of the home's purchase price. PMI protects the lender (not you) if you default on the loan. While PMI adds to your monthly payment, it allows you to purchase a home sooner without waiting to save a full 20% down payment.
How This Calculator Handles PMI
- Automatic Calculation: PMI is automatically included if down payment is below 20%
- Auto-Removal at 80% LTV: PMI is removed when loan-to-value reaches 80% through payments
- Typical Rate: PMI usually costs 0.5% to 1% of the loan amount annually, paid monthly
- Extra Payments Help: Making extra principal payments reduces your balance faster, reaching 80% LTV sooner
Important: For conventional loans, lenders must automatically cancel PMI when your loan balance reaches 78% of the original home value. You can request cancellation at 80% LTV. FHA loans have different rules - loans originated after June 2013 require mortgage insurance for the life of the loan if down payment was less than 10%.
The Power of Extra Mortgage Payments
Making extra principal payments is one of the most effective ways to save money and build equity faster. This calculator shows exactly how extra payments impact your loan - from interest savings to shortened payoff time. Even modest additional payments create significant long-term savings.
Example: $200/Month Extra
On a $300,000 loan at 6.5% for 30 years:
- • Save approximately $67,000 in interest
- • Pay off mortgage 7 years earlier
- • Build equity $200 faster each month
- • Reach 80% LTV (remove PMI) sooner
Smart Extra Payment Strategies
- Add extra payment to each monthly payment
- Make one extra payment per year (13 instead of 12)
- Apply bonuses or tax refunds to principal
- Round up payments (pay $2,000 instead of $1,898)
- Bi-weekly payments (26 half-payments = 13 full payments)
Choosing the Right Mortgage Term
| Loan Term | Best For | Advantages | Disadvantages |
|---|---|---|---|
| 15-Year | High earners, fast equity builders | Lower rates, less total interest, debt-free sooner | Higher monthly payment, less flexibility |
| 30-Year | First-time buyers, budget-conscious | Lower payment, easier qualification, more flexibility | Higher rates, much more total interest |
Frequently Asked Questions
How accurate is this mortgage calculator?
This calculator uses industry-standard mortgage formulas and provides estimates within pennies of actual lender calculations. It includes all major cost components: principal, interest, property tax, insurance, PMI, and HOA fees. The calculator automatically handles PMI removal at 80% LTV and accurately calculates extra payment impact on both interest savings and payoff time.
What's included in the total monthly payment?
The total monthly payment (often called PITI or PITIA) includes: Principal & Interest (P&I) - the core loan payment that builds equity; Property Taxes - collected monthly and held in escrow; Insurance - homeowners insurance premiums; PMI - if down payment is below 20%; and HOA fees if applicable. This gives you the true monthly housing cost.
How do I remove PMI from my mortgage?
PMI automatically cancels when your loan balance reaches 78% of the original home value. You can request removal at 80% LTV by contacting your lender. This calculator shows when PMI stops in your amortization schedule. Making extra payments helps you reach 80% LTV faster. Some lenders may require a new appraisal to confirm your home's current value.
Should I pay extra toward my mortgage or invest?
Compare your mortgage rate to expected investment returns. If your mortgage is 6.5% and investments might earn 8%, investing could be better mathematically. However, paying off a mortgage is guaranteed "return" and provides peace of mind. Many choose a balanced approach: make modest extra mortgage payments while also investing for retirement.
What's the difference between interest rate and APR?
Interest rate is the cost of borrowing shown in your monthly payment. APR (Annual Percentage Rate) includes the interest rate plus other loan costs like origination fees, discount points, and closing costs, expressed as a yearly rate. APR helps you compare total loan costs between lenders. This calculator uses interest rate for payment calculations.
How much should I budget for property taxes and insurance?
Property taxes typically range from 0.5% to 2.5% of home value annually, varying significantly by location. Homeowners insurance averages $1,000-$2,000 annually but depends on home value, location, coverage amount, and deductible. Check your local tax assessor's website for accurate property tax rates and get insurance quotes for precise estimates.
Why Use This Mortgage Calculator
✓ Accurate PMI Handling
Automatically calculates PMI when needed and removes it at 80% LTV in the amortization schedule - just like real mortgages work.
✓ Complete Cost Breakdown
See exactly where every dollar goes: principal, interest, taxes, insurance, PMI, and HOA fees all clearly itemized monthly and over the loan lifetime.
✓ Extra Payment Calculator
Instantly see how extra payments reduce interest and accelerate payoff. Plan your payment strategy to save thousands in interest charges.
✓ Full Amortization Schedule
View month-by-month payment breakdown showing exactly how your balance decreases and when PMI is removed. Jump to any year to see future payments.