Mortgage Calculator 2026

How Monthly Mortgage Payments Are Calculated

Your monthly mortgage payment is calculated using the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n - 1], where P is the loan principal, r is the monthly interest rate, and n is the total number of monthly payments. This gives you the principal and interest (P&I) portion of your payment.

What's Included in Your Monthly Payment (PITI)

Your total monthly payment (known as PITI) includes four components: Principal (the amount going toward paying down your loan balance), Interest (the cost of borrowing), Taxes (property taxes, typically 1-2% of home value annually), and Insurance (homeowner's insurance protecting your property). If your down payment is less than 20%, you'll also pay Private Mortgage Insurance (PMI), typically 0.3-1.5% of the loan amount annually.

How Interest Rates Affect Your Payment

Interest rates have a dramatic impact on your total cost. On a $300,000 30-year mortgage, the difference between a 6% and 7% rate is about $200/month — or $72,000 over the life of the loan. Even a 0.25% rate reduction can save you $15,000-$20,000 in total interest. This is why shopping for the best rate matters enormously.

30-Year vs 15-Year Mortgage

A 15-year mortgage has higher monthly payments but saves you tens of thousands in interest. For a $300,000 loan at 6.5%, a 30-year mortgage costs $1,896/month with $382,633 in total interest. A 15-year mortgage costs $2,613/month but only $170,362 in interest — saving over $212,000. Use this calculator to compare both options.

When Is PMI Required?

Private Mortgage Insurance (PMI) is required when your down payment is less than 20% of the home's purchase price. PMI typically costs between 0.3% and 1.5% of your original loan amount per year. Once you reach 20% equity in your home, you can request PMI removal. Some loans, like FHA loans, have their own mortgage insurance requirements called MIP.