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Inflation Calculator — Future Value of Money

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Mortgage Payment Calculator

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The mortgage calculator below gives you an instant estimate of your monthly home loan payment — including principal, interest, property taxes, and insurance (PITI). It also generates a full amortization schedule so you can see exactly how much of each payment goes toward equity versus interest over the life of the loan.

Unlike simplified calculators that only show principal and interest, our tool factors in the four components lenders actually require you to pay monthly: principal, interest, property taxes, and homeowners insurance (plus PMI when your down payment is below 20%). This gives you a realistic number to budget against, not an artificially low one.

How This Calculator Works

A mortgage payment is calculated using the standard amortization formula:

M = P × [ r(1+r)n / ((1+r)n − 1) ]

Where:

  • M = monthly payment (principal + interest)
  • P = loan principal (home price minus down payment)
  • r = monthly interest rate (annual rate ÷ 12)
  • n = total number of payments (years × 12)

To this base payment we add the monthly portion of property tax (annual tax ÷ 12), homeowners insurance (annual premium ÷ 12), and, if your down payment is under 20%, private mortgage insurance (PMI) — typically 0.3% to 1.5% of the original loan amount per year, divided by 12.

When to Use This Calculator

Use this mortgage calculator when you are:

  • House hunting — to set a realistic price ceiling before you start viewing properties.
  • Comparing loan offers — different lenders quote different rates and points; plug each in to see the true monthly difference.
  • Deciding on a down payment — see how putting 5%, 10%, or 20% down changes both your monthly payment and whether you will pay PMI.
  • Considering refinancing — compare your current payment against a new rate to estimate savings.
  • Budgeting for closing — understand the long-term monthly commitment, not just the purchase price.

Example Calculation

Say you are buying a $400,000 home with a 10% down payment ($40,000), on a 30-year fixed mortgage at 6.75% APR. Property taxes are $4,800/year and homeowners insurance is $1,400/year.

  • Loan principal: $360,000
  • Monthly principal + interest: $2,334
  • Monthly property tax: $400
  • Monthly insurance: $117
  • Estimated PMI (0.5%): $150
  • Total monthly payment: ≈ $3,001

Notice that taxes, insurance, and PMI add nearly $667 to the base payment — a 28% increase over principal and interest alone. That is why a PITI-based calculator is essential for real-world budgeting.

FAQ

Frequently Asked Questions

What is PITI?

PITI stands for Principal, Interest, Taxes, and Insurance — the four components of a typical monthly mortgage payment. Lenders use your PITI (plus any HOA fees and PMI) to calculate your debt-to-income ratio when qualifying you for a loan.

How much do I need for a down payment?

Conventional loans require a minimum of 3%–5% down, but putting less than 20% down means you will pay private mortgage insurance (PMI) until your loan-to-value ratio reaches 80%. FHA loans require 3.5% down, VA and USDA loans can require 0%.

What is PMI and when does it go away?

Private Mortgage Insurance protects the lender (not you) if you default. It is typically required when your down payment is below 20%. You can request PMI cancellation once your loan balance reaches 80% of the home's original value, and it auto-terminates at 78%.

Does this calculator include property tax and insurance?

Yes. Enter your annual property tax and homeowners insurance premium and the calculator divides each by 12 and adds them to your monthly payment. You can also include PMI and HOA fees for a complete picture.

How accurate is the interest rate I should enter?

The rate you enter should reflect the APR quoted by a lender for your specific scenario — including your credit score, loan type, and down payment. Average market rates are published daily by Freddie Mac, but your actual rate may be higher or lower based on your profile.

Can I use this for an FHA, VA, or jumbo loan?

The core amortization math applies to all fixed-rate loans. However, FHA loans include upfront and annual mortgage insurance premiums (MIP) that differ from PMI, VA loans have a funding fee, and jumbo loans have different qualification thresholds. Use this calculator for estimates and consult a lender for loan-specific costs.

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Important Disclaimer:

This inflation calculator is provided for informational and educational purposes only and does not constitute financial, tax, legal or investment advice. Results are estimates based on the inputs you provide and standard formulas; actual figures may vary due to rounding, jurisdiction-specific rules, fees, or changing market conditions. Always consult a licensed financial advisor, tax professional, or legal counsel before making decisions based on these calculations. See our full Disclaimer.

R
Rachel Hammond
CFP® — Certified Financial Planner

Rachel is a Certified Financial Planner with over 14 years of experience guiding individuals and families through tax planning, retirement strategy and investment management. She holds a degree in Economics from the University of Michigan and has been quoted in Forbes, CNBC and The Wall Street Journal.

CFP® Certified 14+ years experience Quoted in Forbes & CNBC