This calculator uses industry-standard financial formulas to provide accurate estimates. It is for informational purposes only. Consult a financial advisor for specific advice.
Use the **Monthly Mortgage Payment Calculator** to quickly estimate your total house payment, including Principal & Interest (P&I), Property Taxes, Homeowner’s Insurance, and HOA fees (PITI+HOA).
Monthly Mortgage Payment Calculator
Estimated Total Monthly Payment
Detailed Calculation Steps
Enter valid inputs and click “Calculate” to see the detailed steps.
Monthly Mortgage Payment Formula
The core P&I (Principal and Interest) monthly payment is calculated using the standard amortization formula:
Formula Sources: The formula is a widely accepted standard in finance, detailed by institutions like Bankrate and Kiplinger.
Variables Used
- M (Monthly Payment): The required monthly installment for Principal and Interest.
- P (Principal Loan Amount): The total amount borrowed.
- R (Annual Interest Rate): The yearly interest rate expressed as a percentage.
- i (Monthly Interest Rate): The annual rate divided by 12 (i = R / 1200).
- n (Number of Payments): The total number of payments over the life of the loan (n = Loan Term in Years * 12).
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What is the Monthly Mortgage Payment?
A monthly mortgage payment is the recurring cost associated with owning a home through a loan. The total payment is often referred to as **PITI + HOA**, which stands for Principal, Interest, Taxes, Insurance, and Homeowners Association fees.
The two main components are **P&I** (the cost to service the debt) and **Taxes & Insurance** (escrow components required by the lender). Understanding the full PITI cost is crucial because lenders often collect the annual property tax and insurance premiums in monthly installments and hold them in an escrow account, ensuring these obligations are met.
How to Calculate Monthly Mortgage Payment (Example)
- Convert Annual Rate to Monthly Rate (i): If the annual rate (R) is 6.0%, the monthly rate (i) is 0.06 / 12 = 0.005.
- Calculate Total Payments (n): For a 30-year loan, the total number of payments (n) is 30 * 12 = 360.
- Calculate the P&I Payment (M): Plug your principal (P), monthly rate (i), and total payments (n) into the amortization formula. For a $300,000 loan, this might result in a P&I payment of $1,798.65.
- Determine Monthly Taxes and Insurance: Divide your annual property tax ($3,600) and annual insurance ($1,200) by 12. This adds $300 + $100 = $400 to the monthly payment.
- Calculate Total Payment: Add P&I, monthly taxes, monthly insurance, and any HOA fees. $1,798.65 (P&I) + $400 (T&I) + $50 (HOA) = $2,248.65.
Frequently Asked Questions (FAQ)
- What is PITI? PITI is an acronym for Principal, Interest, Taxes, and Insurance. It represents the full cost of a mortgage payment handled by the lender, often through an escrow account.
- Do property taxes and insurance always fluctuate? Yes. Property taxes can change yearly based on local assessments, and insurance premiums can rise based on market conditions, which means your total monthly payment will also adjust.
- What is Private Mortgage Insurance (PMI)? PMI is usually required if your down payment is less than 20% of the home’s purchase price. It protects the lender and is added to the total monthly payment.
- How much does the loan term affect the payment? A shorter loan term (e.g., 15 years vs. 30 years) drastically increases the monthly payment but saves a significant amount of money in interest over the life of the loan.