Mortgage Calculator
$90,000 down · 80% loan-to-value
Try $100–$300 to see the effect
Loan term
Monthly payment (PITI)
$3,025.44
$360,000 loan · paid off Nov 2056
- Principal & interest
- $2,275.44
- Property tax
- $450.00
- Home insurance
- $150.00
Total interest
$459,164
Total cost of ownership
$1,035,764
Amortization — principal vs interest by year
| Year | Principal paid | Interest paid | Balance left |
|---|---|---|---|
| Year 1 | $4,024 | $23,282 | $355,976 |
| Year 2 | $4,293 | $23,012 | $351,683 |
| Year 3 | $4,581 | $22,725 | $347,102 |
| Year 4 | $4,888 | $22,418 | $342,215 |
| Year 5 | $5,215 | $22,090 | $337,000 |
30-year fixed at 6.50%.
PMI is estimated at 0.5% of the loan per year and removed once the balance falls to 80% of the purchase price — here $360,000. Closing costs (typically 2%–5% of the price) are not included.
Brokers quote principal and interest. Your bank account sees more: property tax, insurance, HOA, and — under 20% down — PMI. Enter your numbers to see the full monthly payment, total interest, your payoff date, and how much an extra $100 or $200 a month would actually save you.
A mortgage payment is not one number, and comparing lenders on principal and interest alone is the most expensive mistake first-time buyers make. The bundle — principal, interest, taxes, insurance — is what actually leaves your account each month. Lenders have a tidy acronym for it, PITI. Most budgets just call it "wait, why is my payment $400 higher than the listing site said?"
- Principal — the part that reduces what you owe.
- Interest — the lender's charge on the outstanding balance, front-loaded in the early years.
- Taxes — local property tax, usually escrowed monthly even though it is assessed annually.
- Insurance — homeowner's hazard insurance, also escrowed.
- HOA dues and PMI, where they apply, sit outside PITI but inside your real budget.
M = L · r / (1 − (1 + r)^−n)- M
- monthly principal and interest
- L
- loan amount (price minus down payment)
- r
- annual rate ÷ 12
- n
- total payments (years × 12)
Why almost all of your first-year payment is interest
Interest is charged on the remaining balance, and the balance barely moves at first. On a $350,000 loan at 6.5% over 30 years, the payment is about $2,212 — and in year one, roughly $22,600 of what you pay is interest while only about $3,900 touches the loan. By year 15 the split is close to even. Nobody warns you about this at closing. It isn't a lender trick; it's just what happens when a level payment meets a big balance.
| Year | Principal paid | Interest paid | Remaining balance |
|---|---|---|---|
| 1 | $3,912 | $22,635 | $346,088 |
| 5 | $5,070 | $21,477 | $327,638 |
| 10 | $7,011 | $19,536 | $296,716 |
| 20 | $13,406 | $13,140 | $194,827 |
| 30 | final | — | $0 |
Principal and interest paid during each year; total interest across the loan is $446,404.
How extra payments cut interest and shorten the loan
Every extra dollar goes straight to principal, killing all the future interest it would have generated. On the loan above, $200 a month cuts the term by roughly six years and saves on the order of $108,000 — a risk-free, tax-free return most savings accounts cannot match. The catch deserves respect, though: money paid into a mortgage is hard to get back, and any card balance or personal loan charging more than your mortgage rate should come first. Fund your emergency reserve before either. We built the side-by-side comparison into the calculator so you can see both sides before committing to anything.
PMI and the 20% line
With less than 20% down, lenders typically require private mortgage insurance, usually 0.3%–1.5% of the loan annually. It protects the lender, not you, and it should disappear once your balance falls to 80% of the original value — either automatically at 78% under federal rules, or earlier if you request cancellation with an appraisal. Reaching that threshold faster is one of the strongest arguments for extra principal payments.
15-year versus 30-year: the real trade-off
| Term | Monthly P&I | Total interest | Interest saved |
|---|---|---|---|
| 30 years | $2,212 | $446,404 | — |
| 20 years | $2,610 | $276,280 | $170,124 |
| 15 years | $3,049 | $198,797 | $247,607 |
15-year loans often price 0.25–0.5 points below 30-year loans, which widens the gap further.
Mistakes worth avoiding
- Shopping on rate alone and ignoring lender fees — a lower rate with $6,000 in points can lose to a higher rate with none.
- Forgetting that taxes and insurance rise over time while principal and interest do not.
- Treating a pre-approval amount as a budget; it is a ceiling set by a lender's model, not by your life.
- Paying for PMI longer than necessary because nobody requested cancellation.
- Draining reserves for a larger down payment and then financing the first repair on a credit card.
Sources & review
Reviewed by The Numberridge Editorial Team
Fact-checked · methodology documented
Amortization logic, PMI thresholds and closing-cost assumptions cross-checked against CFPB guidance before publication.
Last updated October 2026
Frequently asked questions
What does PITI mean in a mortgage payment?
PITI stands for Principal, Interest, Taxes and Insurance — the four components most lenders include in the payment they qualify you on. Principal reduces the balance, interest is the lender's charge, and taxes plus insurance are usually collected monthly into an escrow account even though the bills are annual.
How much house can I afford on my salary?
A common guideline is the 28/36 rule: housing costs at or below 28% of gross monthly income, and total debt payments at or below 36%. Many lenders will approve more than that. Stress-test the payment at a rate 1–2 points higher before committing, since a fixed payment today can still squeeze a budget if income falls.
Do extra mortgage payments really save interest?
Yes, and dramatically. Extra money goes straight to principal, removing every future interest payment that principal would have generated. On a $350,000 30-year loan at 6.5%, an extra $200 a month saves roughly $108,000 in interest and pays the loan off about six years early.
Why is most of my early payment interest?
Interest is charged on the outstanding balance, which is largest at the start. With a level payment, the interest portion is therefore biggest in month one and shrinks every month as the balance falls. On a 6.5% 30-year loan, roughly 86% of first-year payments go to interest.
When does PMI go away?
Private mortgage insurance is generally required when you put down less than 20%. It must terminate automatically once the balance reaches 78% of the original value, and you can usually request cancellation at 80% with an appraisal. Extra principal payments get you there sooner.
Is a 15-year mortgage better than a 30-year?
It depends on cash flow, not just interest. A 15-year loan carries a higher payment but typically a lower rate and roughly half the total interest. Choose the shorter term only if the higher payment still leaves you with an adequate emergency reserve and retirement contributions intact.
Should I count property tax and insurance in my budget?
Absolutely. They are part of the monthly outlay and they rise over time, while principal and interest stay fixed. A payment that looks comfortable at $2,200 can become $2,600 five years later purely from tax reassessment and insurance repricing.
Does this calculator include closing costs?
No. Closing costs — typically 2%–5% of the purchase price for lender fees, title, appraisal and prepaid escrows — are paid upfront and are separate from the monthly payment shown here. Budget for them in cash alongside the down payment.
Still unsure? Ask us a question — we answer within two business days.
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