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.

Every payment you make on a fixed-rate mortgage is the same dollar amount, but the internal split shifts month by month. Early on, most of the payment is interest and only a small slice goes to principal — meaning equity builds slowly. As the loan ages, that ratio flips. By year 20 of a 30-year mortgage, most of each payment is principal. This pattern is called amortization, and it is why a 30-year mortgage at 7% can cost more in lifetime interest than the original price of the house.

The Mortgage Payment Formula (PITI)

PITI = P&I + (annualTax / 12) + (annualInsurance / 12) + PMI

The principal-and-interest portion is identical to the loan EMI formula. It is a closed-form equation that produces a single fixed monthly payment from the loan amount, rate, and term:

P&I = L * [ r * (1 + r)^n ] / [ (1 + r)^n - 1 ]
where  L = loan amount,  r = (annual APR) / 12,  n = total monthly payments

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.

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.

15-Year vs. 20-Year vs. 30-Year — Which Term Wins?

Term length is the single biggest non-rate lever on lifetime mortgage cost. Shorter terms carry lower rates AND amortize faster — the combined effect is dramatic. The table below shows the same $400,000 loan at three terms. Rates reflect the typical 25 bp spread lenders offer between 30-year and 15-year products in 2026.

A common compromise: take the 30-year for its lower required payment, then voluntarily pay the 15-year amount most months. You get cash-flow flexibility in a bad month plus the payoff speed of the 15-year — at the cost of the slightly higher 30-year rate, which on this example is ~65 bps higher than the 15-year. Use the payoff-vs-invest calculator to see whether the extra principal payments beat investing the same dollars.

How Down Payment Size Affects Your Payment

Most buyers focus on the rate. The down payment matters at least as much, because it shifts both the loan amount and whether PMI applies. The table below holds the home price ($500,000), rate (6.5%), and term (30 years) constant and varies only the down payment.

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 under the Consumer Financial Protection Bureau’s qualified-mortgage rule, and some non-QM products push to 50%, but approval is a lender’s ceiling — not your target.

Two ratios get used here, and lenders track both. The front-end ratio is PITI alone divided by gross monthly income (target 28%). The back-end ratiois PITI plus every other monthly debt obligation divided by gross income (target 36%). Both ratios use gross, not net, which is why approvals routinely look generous compared to what your actual take-home can sustain after taxes, retirement contributions, health insurance premiums, and recurring savings. Cross-check against the Can I Afford This? calculator for the take-home view.

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. See the PMI removal date calculator for the exact month your scheduled balance crosses 80%.

How Mortgage Rates Are Set

Mortgage rates do not move directly with the Fed funds rate, even though press coverage often implies they do. The chain runs Fed funds → 10-year Treasury yield → mortgage-backed-securities (MBS) yield → consumer mortgage rate. The 10-year Treasury is the most important node — it reflects long-run inflation expectations, and mortgages compete with Treasuries for investor capital. The spread between 30-year mortgage rates and the 10-year Treasury is typically 150–250 basis points; that spread widens in stress (it hit ~300 bps in 2023) and compresses in calm markets.

Inside the consumer rate, you pay a series of add-ons: loan-level price adjustments (LLPAs) for credit score, LTV, occupancy, and property type. A 760-FICO primary-residence borrower with 25% down gets the cleanest rate. A 680-FICO investor with 15% down on a condo pays meaningfully more — often 75–125 bps above the headline rate. The Freddie Mac Primary Mortgage Market Survey (PMMS) publishes the weekly average 30-year fixed rate every Thursday, and is the canonical reference. Lender rate sheets update daily and often intraday in volatile markets.

Two more rate-related variables get confused: APR and the note rate. The note rate is the actual interest rate used in the amortization formula above. The APR includes the rate plus prepaid fees (origination points, mortgage insurance, escrow setup) amortized over the loan term. APR is always higher than the note rate and is the right number to use when comparing competing loan estimates — it normalizes for fee structure.

Closing Costs Explained

On top of your down payment, closing costs run 2%–5% of the loan amount and are due at the closing table. On a $400,000 mortgage, expect $8,000–$20,000 over and above your down payment. The line items break into three buckets:

• Lender fees: origination fee (0.5%–1% of loan), application, underwriting, processing. Often negotiable; ask for the loan estimate and shop at least 2–3 lenders.
• Third-party fees:appraisal ($500–$1,000), credit report ($30–$80), title insurance (lender’s policy required; owner’s policy optional but usually worth it — ~0.5% of home price total), survey if required, attorney fees in attorney-state closings ($500–$1,500).
• Prepaids and escrow:3–12 months of property tax, 12 months of home insurance, daily interest from closing date to month-end, and the 2-month escrow cushion. These are not “costs” in the strict sense — they pre-fund your escrow account — but you do need cash for them at closing.

Use the closing cost calculator to budget the full cash-to-close figure (down payment + closing costs + prepaids), which is usually 25–40% more than your down payment alone. Sellers sometimes contribute toward closing costs as part of negotiation — conventional loans allow up to 3% seller concessions at 5%–10% down and 6% at 20%+ down.

Mortgage Terminology — Quick Reference

Eight terms that show up on every loan estimate and that lenders rarely explain plainly. Skim the snippet line; expand the card if you need the longer version.

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.
• Comparing rates without comparing APR. A 6.5% loan with 1 origination point can have a higher APR than a 6.75% loan with zero points. Use the APR for true apples-to-apples comparison of competing loan estimates.
• Forgetting the rate-lock window. Most rate locks are 30, 45, or 60 days. If closing slips past the lock expiration, you either pay a lock extension fee or re-price at the current market rate. Confirm the lock terms in writing.

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, the compound interest calculator to see what the equivalent money would grow into if invested instead, and the amortization schedule calculator to see the principal-vs-interest split month by month for your specific loan.