Mortgage Calculator
Estimate your monthly mortgage payment with taxes and insurance included. See your full amortization schedule and understand the true cost of your home loan.
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Understanding Your Mortgage
Buying a home is one of the biggest financial decisions you will ever make. Understanding how mortgages work can save you tens of thousands of dollars over the life of your loan.
What Is PITI?
Your monthly mortgage payment is often called PITI, which stands for the four components lenders bundle together:
- Principal — The amount you borrowed to buy the home. Each payment reduces this balance.
- Interest — The cost of borrowing money, expressed as an annual percentage rate (APR).
- Taxes — Property taxes assessed by your local government, typically paid through an escrow account.
- Insurance — Homeowners insurance that protects your property, also usually escrowed.
Lenders use your PITI payment to determine how much home you can afford.
The 28/36 Rule
Most financial experts recommend following the 28/36 rule when budgeting for a home:
- 28% Rule: Your monthly PITI payment should not exceed 28% of your gross monthly income.
- 36% Rule: Your total debt payments (PITI + car loans + student loans + credit cards, etc.) should not exceed 36% of your gross monthly income.
For example, if your household earns $8,000 per month, your PITI should ideally stay under $2,240 (28%), and your total debt payments under $2,880 (36%).
How Amortization Works
With a fixed-rate mortgage, each monthly payment is the same dollar amount, but the split between principal and interest changes over time. Early in the loan, most of your payment goes toward interest. Over time, more goes toward principal. This is why making extra payments early can dramatically reduce the total interest you pay.
The standard mortgage payment formula is:
M = P × [r(1+r)n] / [(1+r)n − 1]
Where P is the loan amount, r is the monthly interest rate, and n is the total number of payments.
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⚠️ Disclaimer: This calculator is for educational and estimation purposes only. Results are based on the inputs provided and assume a fixed interest rate for the full loan term. Actual mortgage rates, property taxes, and insurance costs vary by location, lender, and individual circumstances. This does not constitute financial advice. Consult a qualified mortgage professional before making home financing decisions.