Mortgage Calculator

Your monthly mortgage payment is made up of four main components, often referred to as PITI: principal, interest, taxes, and insurance. The principal is the portion that goes toward paying down your loan balance, while interest is the cost charged by your lender for borrowing the money.

Property taxes and homeowners insurance are typically collected monthly and held in an escrow account. If your down payment is less than 20%, you may also be required to pay private mortgage insurance (PMI), which protects the lender in case of default.

How Amortization Works

Mortgage loans use an amortization schedule that determines how each payment is split between principal and interest. In the early years, most of your payment goes toward interest. As the balance decreases, more of each payment is applied to principal. Making extra payments early in your mortgage can save significant money over the life of the loan.

Choosing the Right Loan Term

The most common mortgage terms are 15-year and 30-year fixed-rate loans. A 30-year term offers lower monthly payments but costs more in total interest. A 15-year term has higher monthly payments but builds equity faster and saves substantially on interest. Use the calculator above to compare different terms and find the right balance for your budget.