Free Mortgage Calculator — Monthly PITI Payment with Tax, Insurance & PMI

What is a Mortgage?

A mortgage is a long-term, secured loan used to buy real estate. The property itself is the collateral — if the borrower fails to pay, the lender can foreclose and recover their money by selling the property. Mortgages are the largest financial commitment most people ever make, which is why the full monthly payment is quoted as PITI: Principal, Interest, Taxes, and Insurance. Those four pieces together are the true cost of owning a home.

The Mortgage Payment Formula (PITI)

The principal-and-interest portion is identical to the loan EMI formula. The mortgage-specific parts are the escrow items — the lender typically collects 1/12 of the annual property tax and 1/12 of the insurance premium with every payment, holds them in escrow, and pays the county and insurer on your behalf when they come due. This is why your monthly payment can feel much higher than a simple loan calculator suggests.

How to Use This Calculator

1. Enter the home price — the contract price you plan to pay.
2. Enter your down payment. 20% avoids PMI. Putting 5–10% down is common for first-time buyers — the calculator will apply PMI automatically.
3. Enter the interest ratefrom your lender’s loan estimate.
4. Enter the loan term. 30-year fixed is the US default; 15-year is far cheaper over the loan’s life but has a bigger monthly payment.
5. Optionally add annual property tax (usually 1–2% of home price in the US) and home insurance(typically $1,000–$2,500/yr for a single-family home). Leaving them blank computes P&I only.

The 28% Rule — Can You Afford This Home?

A widely used affordability benchmark: your full PITI payment should not exceed 28% of your gross monthly income. The calculator surfaces the minimum comfortable income this payment implies (PITI ÷ 0.28). If that number is higher than your actual income, you are “house poor” — technically approved by the lender, but stretching every other part of your budget.

The extended 28/36 rulealso caps your total monthly debt payments (PITI plus auto loans, credit cards, student debt, etc.) at 36% of gross income. Mortgage lenders will often approve you up to 43% DTI, but approval is a lender’s ceiling — not your target.

Three Worked Examples

Three real-world scenarios, each computed with the PITI formula this calculator uses. Copy the numbers into the inputs above to reproduce them and then experiment with your own.

Example 1 — First-time buyer with 5% down

Home price $350,000, down payment 5% ($17,500), rate 7.0% APR, term 30 years. The loan amount is $332,500. P&I works out to $2,212.13/month. Because the down payment is under 20%, the calculator applies PMI at the industry-midpoint 0.75% annual rate — that is 332,500 × 0.0075 ÷ 12 = $207.81/mo. Add property tax at 1.2% of home price ($350/mo) and insurance at $1,500/yr ($125/mo) and your full PITI is $2,894.94/month. Total interest over the loan’s life: $463,867 — materially more than the principal borrowed. PMI alone costs this buyer roughly $18,700 before equity crosses the cancellation line.

Example 2 — Conventional 20% down, avoiding PMI

Home price $500,000, down payment 20% ($100,000), rate 6.5% APR, term 30 years. Loan amount: $400,000. P&I = $2,528.27/mo. No PMI applies. Tax at 1.1% of price adds $458.33/mo and insurance at $1,800/yr adds $150/mo, for a full PITI of $3,136.61/month. Total interest over 30 years: $510,178. Note that even with the 50-basis-point lower rate and no PMI, the absolute interest bill is higher here than in Example 1 — because the loan itself is larger. Rate is one lever; loan size is the other.

Example 3 — Refinance from 7.5% to 5.75%

Original loan $350,000 at 7.5% APR, 30 years, opened four years ago. P&I was $2,447.25/mo; the remaining balance is now about $335,512 with 26 years left. Refinancing that balance at 5.75% APR for 26 years drops P&I to $2,074.54/mo — a $372.71/month savings and $116,286 less interest over the remaining term. That refi only makes sense if closing costs (typically 2–3% of the new loan, or ~$7,000–$10,000) are recovered inside the time you plan to stay in the home — in this case about 19–27 months to break even.

When This Calculator Decides For You

Mortgage math rarely sits still as an academic exercise. The calculator’s output almost always maps to a concrete yes/no choice. The four that matter most:

1. Rent vs buy crossover. Compute full PITI here and compare it to rent on a comparable property. Buying wins on a 5+ year horizon when PITI plus 1% of home price per year (for maintenance) is within roughly 25% of the rent. If you would move inside three years, buying almost never beats renting once closing costs and the 5–6% sell-side commission are in the picture.
2. 15-year vs 30-year term. Run both in the calculator. If the 15-year PITI is at or under 28% of your gross monthly income, take the 15. You save hundreds of thousands in interest and build equity ~3× faster in the first five years. If the 15-year PITI pushes past 32%, take the 30-year and commit in writing to a fixed extra principal payment.
3. 20% down vs lower-down-with-PMI. PMI costs ~0.75% of the loan annually, but the opportunity cost of locking an extra ~$60,000 into home equity is also roughly 5–7% if invested in a broad-market index. On small rate differentials the math favors putting less down, paying PMI, and investing the difference. Use the compound interest calculator with the same dollar amount to see the shape of that trade.
4. ARM vs fixed-rate. Adjustable-rate mortgages quote 0.5–1.25% below fixed today. The rule of thumb: if you will sell or refinance before the first rate reset (typically year 5, 7, or 10 on a hybrid ARM), the ARM saves real money. If you will still hold the loan past the reset, the fixed almost always wins because rate caps do not protect against a 5-point shift across a decade.

The Hidden Cost of PMI

Private Mortgage Insurance is an insurance policy the lender benefits from but the borrower pays for. It exists because conventional loans above 80% loan-to-value (LTV) carry higher default risk, and PMI compensates the lender for that risk until the borrower builds enough equity. The sharp edge: PMI is pure cost to you — zero of it pays down principal, reduces interest, or builds equity.

The 80% LTV line is a genuine cliff. On a $400,000 home with 5% down, PMI costs roughly $237.50/month (380,000 × 0.0075 ÷ 12). On the same home with 20% down, it drops to $0. Between 5% and 20% there is no sliding scale in most conventional policies — the insurance is either on or off, and crossing the threshold even by a dollar removes the premium entirely.

Under the federal Homeowners Protection Act of 1998 (HPA), lenders must automatically terminate PMI when the loan balance reaches 78% of original home value based on the scheduled amortization — regardless of current market value. You can also request cancellation at 80% LTV in writing, but the automatic cut-off at 78% is the legal backstop. On a 30-year mortgage with 5% down, natural amortization alone gets you there in roughly 10–12 years; making modest extra principal payments can cut that in half.

Common Mistakes When Calculating a Mortgage

• Treating the “principal and interest” quote as the real payment. Many online calculators only compute P&I. Adding tax and insurance typically adds 15–25% to the monthly cost.
• Ignoring PMI when putting less than 20% down.PMI costs about 0.5–1.5% of the loan amount per year and rolls into the monthly payment until you reach 22% equity. Factor it in; don’t get surprised at closing.
• Forgetting HOA dues. This calculator does not bundle HOA. If the home is in a condo or HOA community, add the HOA fee manually to your PITI total.
• Choosing a 30-year term without running the 15-year number. Shorter terms usually carry lower rates AND cost dramatically less interest. Run both; the monthly payment difference is often smaller than expected.
• Assuming a pre-approval is your real budget. Lenders qualify you on gross income and hard debts — they do not see daycare, commuting cost, or savings goals. Compare the PITI here against your actual take-home surplus in the Can I Afford This? tool before trusting a pre-approval letter.
• Skipping the escrow cushion. Lenders are allowed to hold up to two months of tax and insurance reserves in escrow. At closing you will often prepay 3–12 months of each — budget an extra $2,000–$6,000 beyond down payment and closing costs.

15-Year vs. 30-Year — Which is Better?

On a $400,000 loan at 7% APR:

• 30-year:~$2,661/mo P&I, ~$558,000 total interest.
• 15-year:~$3,595/mo P&I, ~$247,000 total interest.

The 30-year is ~$934/month cheaper, but you pay an extra $311,000 in interest for that flexibility. A common compromise: take the 30-year for its lower required payment, then voluntarily pay the 15-year amount most months. You get the cash-flow flexibility in a bad month plus the payoff speed of the 15-year.

Related Planning Tools

A mortgage payment is only part of the picture. The loan EMI calculator lets you strip a mortgage back to just its principal-and-interest mechanics — useful for comparing it against an auto or personal loan. Use the Can I Afford This? calculator to check the full PITI payment against your budget, and the compound interest calculator to see what the equivalent money would grow into if invested instead.