Mortgage Calculator, Monthly Payment, Amortization & Total Interest

Down Payment Strategies

Putting down 20% or more avoids the cost of Private Mortgage Insurance (PMI), which can add $100-300/month to your payment. However, you do not need 20% to buy a home:

• Conventional: As low as 3% down
• FHA: 3.5% minimum down payment
• VA: 0% for eligible veterans
• USDA: 0% in eligible rural areas

15-Year vs. 30-Year

On a $280,000 loan at 6.5%:

• 30-year: $1,770/mo, $357,000 total interest
• 15-year: $2,440/mo, $159,000 total interest

The 15-year option saves nearly $200,000 in interest but requires $670 more per month.

What Is PITI?

PITI stands for Principal, Interest, Taxes, and Insurance. These four components make up your total monthly housing cost. Lenders use PITI to determine how much you can borrow.

Closing Costs

Budget 2-5% of the purchase price for closing costs. On a $350,000 home, expect $7,000-$17,500 in fees including:

• Loan origination fee (0.5-1%)
• Appraisal ($300-600)
• Title insurance ($500-1,500)
• Home inspection ($300-500)
• Prepaid taxes and insurance

When to Use This Calculator

• Before house hunting: Set a realistic budget based on what monthly payment you can afford.
• Comparing loan offers: Plug in different rates to see the true cost difference over the loan life.
• Refinance decisions: Compare your current payment against a new rate to estimate monthly savings.

Real-World Examples

Example 1, First-time buyer: Home price $320,000, 5% down ($16,000), 30-year at 7.0%, $3,000 property tax/yr, $1,200 insurance/yr. Monthly PITI ≈ $2,373. Annual income needed: $102,000+ (28% rule on the full PITI payment).

Example 2, Move-up buyer: Home price $550,000, 20% down ($110,000), 15-year at 6.25%. Monthly P&I ≈ $3,773. Total interest paid: ≈$239,100, less than half the equivalent 30-year loan's ≈$535,300.

Limitations & Assumptions

• Does not include HOA fees, which average $200-400/month in many communities.
• Property tax is entered as a fixed annual amount, real taxes change with assessed value.
• Does not model adjustable-rate mortgages (ARM) where rate changes after an initial period.
• PMI cost is not calculated separately, add $50-300/month if down payment is under 20%.

Related Guides

• How to Use a Mortgage Calculator Effectively - amortization, rate comparisons, and extra payment strategies
• Which Financial Calculator to Use and When

Data Sources

Payment formula: standard amortization (P × r(1+r)ⁿ / ((1+r)ⁿ − 1)). Down payment loan types per HUD and Fannie Mae guidelines. Historical mortgage rate context from Freddie Mac PMMS weekly survey.