Mortgage Calculator

The standard amortizing mortgage formula is M = P · [r(1+r)^n] / [(1+r)^n − 1], where P is the loan principal (home price minus down payment), r is the monthly interest rate (annual rate divided by 12), and n is the number of monthly payments (years × 12).

Conventional loans typically require 5–20% down, with 20% being the threshold to avoid private mortgage insurance (PMI). FHA loans allow as little as 3.5% down. The default in this calculator is 20% on a $400,000 home — $80,000 — which avoids PMI for most lenders.

PITI stands for Principal, Interest, Taxes, and Insurance — the four components of your total monthly housing payment. This calculator shows all four separately and sums them as "Total Monthly Cost."

A longer term (e.g., 30 years vs 15 years) lowers the monthly payment but increases total interest paid over the life of the loan. A 15-year mortgage has a higher monthly cost but builds equity faster and saves substantially on interest.

The interest rate is the cost of borrowing the principal. APR (Annual Percentage Rate) includes the interest rate plus other lender fees (origination, points, broker fees) and is generally higher. This calculator uses the interest rate, not APR.