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How to Calculate Your Mortgage Payment - Step by Step Guide

Step 1

Enter Your Home Details

Start by entering the basic information about your home purchase. This calculator helps you understand exactly what your monthly mortgage payment will be.

•
Home Price: The purchase price of the home (e.g., $300,000)
•
Down Payment: Amount or percentage you're paying upfront (e.g., 20% or $60,000)
•
Interest Rate: Your mortgage interest rate (e.g., 7%)
•
Loan Term: Length of mortgage (10, 15, 20, or 30 years)

Example Scenario

Jessica is buying a $450,000 home. She has $67,500 saved for a 15% down payment and has been approved for a 6.5% interest rate on a 30-year mortgage.

Home Price:$450,000
Down Payment:15% ($67,500)
Loan Amount:$382,500
Interest Rate:6.5%
Term:30 years
Step 2

Add Additional Monthly Costs

Your total monthly payment includes more than just principal and interest. Add these costs for an accurate picture of your full monthly housing payment.

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Property Tax: Monthly property tax (typically 1-1.5% of home value annually, divided by 12)
•
Home Insurance: Monthly homeowners insurance premium (typically $100-200/month)
•
HOA Fees: Monthly homeowners association fees (if applicable)
•
PMI: Private Mortgage Insurance (required if down payment is less than 20%)

Understanding PMI (Private Mortgage Insurance)

PMI is required when you put down less than 20%. It typically costs 0.5-1% of the loan amount annually. Once you reach 20% equity, you can request to remove PMI.

20%+ down payment:No PMI required
15% down payment:PMI required (~$160/mo on $380K loan)
10% down payment:Higher PMI (~$225/mo on $380K loan)
Step 3

View Your Complete Payment Breakdown

See your total monthly payment and how it's divided among different components. The calculator shows both your monthly payment and long-term costs.

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Total Monthly Payment: Your complete monthly housing payment
•
Payment Breakdown: See exactly how much goes to principal, interest, taxes, insurance, etc.
•
Total Interest: How much interest you'll pay over the life of the loan

Jessica's Monthly Payment Breakdown

Principal & Interest:$2,418
Property Tax:$350
Home Insurance:$150
PMI (15% down):$159
HOA Fees:$50
Total Monthly Payment:$3,127
Step 4

Review Your Amortization Schedule

See how your mortgage balance decreases year by year. The amortization schedule shows how much principal and interest you pay each year.

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Year-by-Year Breakdown: Detailed table showing principal, interest, and remaining balance for each year
•
Download CSV: Export your amortization schedule for Excel or Google Sheets
•
Copy Results: Save all calculations for future reference or comparison

Frequently Asked Questions About Mortgages

How do I calculate my mortgage payment?

Mortgage payments are calculated using the loan amount, interest rate, and loan term. The formula is: M = P[r(1+r)^n]/[(1+r)^n-1], where M is monthly payment, P is principal, r is monthly interest rate, and n is number of months. Our calculator does this automatically and includes property tax, insurance, and other costs for your complete monthly payment.

How much house can I afford?

A general rule is that your monthly housing payment shouldn't exceed 28% of your gross monthly income. For example, if you earn $6,000/month, your payment should be under $1,680. However, lenders also consider your total debt-to-income ratio, credit score, and down payment. Use our calculator to see what different home prices would cost monthly.

Should I get a 15-year or 30-year mortgage?

A 15-year mortgage has higher monthly payments but you'll pay significantly less interest over time. A 30-year mortgage has lower monthly payments but costs more in total interest. For example, on a $300,000 loan at 7%, a 15-year mortgage costs $2,696/month (total interest: $185,280), while a 30-year costs $1,996/month (total interest: $418,560). Choose based on your budget and financial goals.

What is PMI and how can I avoid it?

Private Mortgage Insurance (PMI) protects the lender if you default. It's required when your down payment is less than 20% of the home price and typically costs 0.5-1% of the loan amount annually. To avoid PMI, save a 20% down payment, or once you reach 20% equity through payments and appreciation, you can request PMI removal. Some loan programs like VA loans don't require PMI.

What's included in my total monthly mortgage payment?

Your total monthly mortgage payment typically includes PITI: Principal (loan repayment), Interest (cost of borrowing), Taxes (property tax), and Insurance (homeowners insurance). If your down payment is less than 20%, add PMI. If you have a condo or HOA property, include HOA fees. Some mortgages also escrow for these costs, meaning your lender collects and pays taxes and insurance on your behalf.

How accurate is this mortgage calculator?

This calculator provides accurate estimates based on the information you enter. However, actual payments may vary due to factors like exact property tax rates, insurance quotes, HOA fees, and lender-specific costs. Use this as a planning tool, and get pre-approved by a lender for your exact payment. Remember to budget for closing costs (typically 2-5% of home price) and ongoing maintenance expenses.

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