Mortgage Payment Calculator With Taxes, Insurance and PMI

A mortgage payment is more than the loan. Lenders look at your full housing cost, and so should you. This calculator adds the five common parts of a monthly payment so the number you see is close to what will actually leave your bank account.

How this mortgage payment calculator works

The calculator first works out the loan amount: home price minus your down payment. It then finds the principal and interest payment with the standard formula for a fully amortizing, fixed-rate loan:

M = P × r ÷ (1 − (1 + r)^−n)

Here P is the loan amount, r is the yearly rate divided by 12 (6.5% becomes 0.065 ÷ 12 = 0.005417), and n is the number of monthly payments (360 for 30 years). The other parts are simple monthly shares:

• Property tax: yearly tax ÷ 12
• Homeowners insurance: yearly premium ÷ 12
• HOA dues: the monthly amount you enter
• PMI: loan amount × PMI rate ÷ 12, but only when the loan is more than 80% of the price

The total is the sum of all five.

Worked examples

Example 1: 10% down on a $400,000 home

Assume a $400,000 home, 10% down, an assumed 6.5% rate on a 30-year loan, $4,800 a year in property tax, $1,800 a year in insurance, no HOA, and PMI at 0.5% a year.

1. Down payment: $400,000 × 10% = $40,000, so the loan is $360,000.
2. Principal and interest: about $2,275 a month.
3. Property tax: $4,800 ÷ 12 = $400. Insurance: $1,800 ÷ 12 = $150.
4. The loan is 90% of the price, so PMI applies: $360,000 × 0.5% ÷ 12 = $150.
5. Total: about $2,975 a month.

Example 2: 20% down, 15-year loan, with HOA dues

Now take a $300,000 condo with 20% down ($60,000), an assumed 6.5% rate over 15 years, $3,600 tax, $1,500 insurance and $120 a month in HOA dues. The loan is $240,000. Principal and interest come to about $2,091, tax $300, insurance $125, HOA $120 and no PMI, because the loan is exactly 80% of the price. The total is about $2,636 a month.

The shorter term raises the payment, but the borrower pays off the home in half the time and pays far less interest in total.

What your result means

Your monthly total is the “housing payment” lenders use in your debt-to-income ratio (DTI). Many conventional loans approved by Fannie Mae’s automated system allow a total DTI up to 50%, and FHA’s standard manual guideline is 31% for housing and 43% for all debts. If your payment pushes you past those levels, try a lower price, a bigger down payment or paying down other debts. Our debt-to-income calculator shows where you stand.

Program rules that change the answer

For FHA, VA or USDA loans, set the PMI rate to zero here and add the program’s own charge with the FHA MIP calculator, VA funding fee calculator or USDA fee calculator.

Assumptions

• Fixed interest rate for the whole term; no adjustable-rate changes.
• Property tax and insurance stay the same each year (in real life they usually rise).
• PMI is a flat yearly percentage of the original loan and stops being shown once the loan is 80% of the price or less.
• The rate box starts at the latest national weekly average shown below the calculator, not an offer.
• Closing costs and points are not included; see the closing cost calculator.

Common mistakes

• Using only principal and interest. Taxes and insurance can add hundreds of dollars a month.
• Using the seller’s old tax bill. Many counties reassess when a home sells, so the new bill may be higher.
• Forgetting HOA dues. Condos and many new subdivisions charge them, and lenders count them.
• Assuming the advertised rate. Your rate depends on your credit, down payment, points and loan type.
• Ignoring rate sensitivity. In Example 1, a rate one point higher (an assumed 7.5%) raises principal and interest from about $2,275 to about $2,517 a month. Try a few rates before you set a budget.

Limits of this estimate

This is an educational estimate. Your lender’s Loan Estimate will show the real figures, including escrow cushions, mortgage insurance quotes and any points. Compare at least three Loan Estimates before you choose, and read our guide to types of mortgage loans if you are still deciding which program fits. A HUD-approved housing counselor can review the numbers with you for free or at low cost.