Use the Zillow Mortgage Calculator to estimate your monthly payment, including principal, interest, property taxes, and home insurance. This provides a comprehensive view of your total housing cost.
Zillow Mortgage Calculator
Estimated Monthly Payment:
Zillow Mortgage Calculator Formula
Monthly P\&I Payment (M):
$$ M = L \left[ \frac{i(1 + i)^{n}}{(1 + i)^{n} – 1} \right] + T_{monthly} + I_{monthly} $$
Where:
- \(L\) = Principal Loan Amount (Home Price – Down Payment)
- \(i\) = Monthly Interest Rate (Annual Rate / 12)
- \(n\) = Total Number of Payments (Loan Term in Years × 12)
- \(T_{monthly}\) = Annual Property Tax / 12
- \(I_{monthly}\) = Annual Home Insurance / 12
Formula Sources: Bankrate Mortgage Formula | Investopedia on Mortgage Payment
Variables Explained
- Home Price ($): The total cost of the property being purchased.
- Down Payment ($): The upfront cash amount you contribute, which reduces the loan principal.
- Annual Interest Rate (%): The yearly cost of borrowing the money, expressed as a percentage (APR).
- Loan Term (Years): The duration over which the loan will be repaid (e.g., 15 or 30 years).
- Annual Property Tax ($): The annual taxes assessed by the government on the property.
- Annual Home Insurance ($): The annual cost of protecting the home against damage or loss.
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- Home Affordability Calculator
What is the Zillow Mortgage Calculator?
The Zillow Mortgage Calculator is a widely used financial tool designed to provide a quick estimate of a user’s potential monthly housing expense. Unlike basic payment calculators that only account for principal and interest (P\&I), the Zillow model typically includes estimates for property taxes (T) and homeowner’s insurance (I), creating a comprehensive PITI (Principal, Interest, Taxes, and Insurance) payment figure.
This holistic approach helps prospective homeowners understand the full scope of their monthly financial commitment, preventing unexpected costs after closing. The estimated payment is crucial for budgeting and determining overall affordability before applying for a loan.
The calculation is based on an amortization schedule, which determines how much of each monthly payment goes toward reducing the principal versus covering the accrued interest over the life of the loan. Early payments are heavily weighted towards interest, while later payments focus more on the principal balance.
How to Calculate Your Monthly Payment (Example)
- Determine the Principal Loan Amount (L): Subtract the Down Payment from the Home Price. (Example: $300,000 – $60,000 = $240,000).
- Find the Monthly Rate (i) and Total Payments (n): Convert the Annual Rate (6.5%) to a monthly rate (0.065 / 12 ≈ 0.005417) and the Term (30 years) to total months (30 × 12 = 360).
- Calculate Monthly P&I: Plug L, i, and n into the core P\&I formula to find the monthly payment needed to amortize the loan.
- Calculate Monthly Tax & Insurance: Divide the Annual Property Tax ($3,000) and Annual Insurance ($1,200) by 12. ($3000/12 = $250.00; $1200/12 = $100.00).
- Sum the Total Monthly Payment: Add the P\&I payment, the monthly tax, and the monthly insurance amounts together for the final PITI estimate.
Frequently Asked Questions (FAQ)
No, the calculator does not typically automatically include Private Mortgage Insurance (PMI). PMI is usually required if your down payment is less than 20% of the home price, and it must be factored in manually for an accurate total payment.
Why is my calculated payment different from a bank’s quote?The calculated payment is an estimate. Banks may use slightly different estimates for property taxes and insurance, or your final interest rate may be adjusted due to closing costs (APR vs. Interest Rate).
What happens to the principal and interest portion over time?In a standard fixed-rate mortgage, the total monthly P&I payment remains constant, but the *distribution* changes. Early payments are mostly interest; later payments are mostly principal.
Can I calculate a 15-year mortgage with this tool?Yes. Simply change the “Loan Term (Years)” input to 15 to instantly calculate the corresponding monthly payment for a shorter loan term.