Basic Mortgage Calculator
Calculate your monthly mortgage payment including principal, interest, taxes, insurance, and PMI. Get a complete breakdown of your home buying costs.
Understanding Your Mortgage Payment
Your mortgage payment typically consists of four components known as PITI: Principal, Interest, Taxes, and Insurance. Understanding each component helps you budget effectively for homeownership.
Components of a Mortgage Payment
- Principal: The portion that goes toward paying down your loan balance
- Interest: The cost of borrowing money from the lender
- Property Taxes: Annual taxes based on your home's assessed value
- Homeowners Insurance: Protection against damage and liability
- PMI: Required if down payment is less than 20%
How to Lower Your Monthly Payment
| Strategy | Impact |
|---|---|
| Larger down payment | Reduces loan amount and may eliminate PMI |
| Lower interest rate | Improves credit score or buy points |
| Longer loan term | Lower payment but more total interest |
| Shop for insurance | Compare quotes from multiple providers |
Understanding PMI
Private Mortgage Insurance (PMI) is required when your down payment is less than 20% of the home's purchase price. PMI typically costs between 0.5% and 1% of the loan amount per year. You can request to remove PMI once you've built 20% equity in your home.
15-Year vs 30-Year Mortgage
- 30-Year: Lower monthly payments, more flexibility, but more total interest paid
- 15-Year: Higher monthly payments, faster equity building, less total interest