Estimate your monthly principal & interest payment, the total interest you will pay the bank over the life of the loan, and your full monthly housing cost including property taxes, insurance and HOA fees.
Estimates are for educational purposes only and are not a loan offer or financial advice. Actual payments depend on your lender, credit profile, taxes and insurance premiums.
How the monthly payment formula works
A fixed-rate mortgage spreads repayment across equal monthly installments. Each installment is calculated with the standard amortization formula:
M = P × r(1 + r)n ÷ ((1 + r)n − 1)
- M — monthly principal & interest payment
- P — loan amount (home price minus down payment)
- r — monthly interest rate (annual rate divided by 12)
- n — total number of monthly payments (years × 12)
Early in the loan, most of each payment covers interest; later, most of it pays down principal. The year-by-year table above shows exactly how that shift happens for your numbers.
Worked example: $400,000 home at 7% over 30 years
With 20% down ($80,000), the loan is $320,000. At a 7% fixed rate over 30 years, the principal-and-interest payment is about $2,129 per month. Over the full term you would pay roughly $446,000 in interest — about 1.4× the amount you borrowed. Add typical property taxes and insurance, and the true monthly housing cost climbs to around $2,800. That gap between the loan payment and the real all-in cost is why this calculator keeps taxes and insurance separate.
Why the interest rate matters so much
When U.S. mortgage rates moved from near 3% in 2021 to around 7% in 2026, the same $320,000 loan jumped from roughly $1,349 to $2,129 per month — an extra $780 every month, or about $280,000 more in interest over 30 years. Small rate changes move real money, which is why buyers watch Fed decisions closely. See our breakdown of the September 2026 rate surge to 7% for the latest context.
What your total monthly housing cost includes
- Principal & interest (P&I): the fixed loan payment that repays the bank.
- Property taxes: set by your state, county and school district — commonly 0.5% to 2.5% of home value per year.
- Homeowners insurance: typically $1,000–$3,000 per year depending on coverage and location.
- HOA / PMI / other: condo or community fees, and PMI if you put less than 20% down.
Taxes and insurance vary with the property and location, not with the loan — so lenders and this calculator treat them as separate add-ons rather than folding them into the rate.
Frequently asked questions
How is a monthly mortgage payment calculated?
Your core payment (principal and interest) uses the standard amortization formula: M = P × r(1+r)^n / ((1+r)^n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments. Property taxes, homeowners insurance and HOA fees are then added on top as separate monthly costs.
What is the difference between the loan payment and the total monthly housing cost?
The loan payment covers only principal and interest — the money that pays back the bank. Your total monthly housing cost also includes property taxes, homeowners insurance and any HOA fees. This calculator keeps the two clearly separated because tax and insurance costs vary by property, county and loan terms, even when the loan itself is identical.
How much are property taxes and homeowners insurance on a typical U.S. home?
Property taxes average roughly 0.5% to 2.5% of a home's value per year depending on the state and county, while homeowners insurance commonly runs between $1,000 and $3,000 per year. Enter the figures quoted for your specific property for the most accurate estimate.
Does this calculator include PMI?
If your down payment is below 20% of the home price, most conventional loans require private mortgage insurance (PMI). You can include it by adding the monthly PMI amount to the HOA / other monthly fees field, or by increasing the insurance figure. PMI typically ranges from 0.3% to 1.5% of the loan amount per year.
What loan term should I choose: 15 or 30 years?
A 30-year term gives you a lower monthly payment but roughly double the total interest compared with a 15-year term at the same rate. A 15-year term builds equity faster and saves heavily on interest, but the higher monthly payment strains budgets. Use this calculator to compare both scenarios side by side before deciding.