Mortgage Calculator

How the Mortgage Calculator works

Use this calculator when you want a broader monthly housing-cost estimate than principal and interest alone. Use Mortgage Payment for a narrower principal-and-interest estimate, Down Payment for purchase-cash questions, House Affordability for income and debt constraints, Mortgage Payoff for extra-payment timing, and lender Loan Estimates, local tax sources, insurer quotes, HOA documents, and mortgage-insurance disclosures for official figures.

The app calculates loanAmount as max(homePrice - downPayment, 0) and downPaymentPercent as downPayment / homePrice * 100 when homePrice is positive. It converts the entered rate with monthlyRate = annualRate / 100 / 12 and paymentCount = termYears * 12. If monthlyRate is 0, monthlyPrincipalInterest equals loanAmount / paymentCount. Otherwise monthlyPrincipalInterest = loanAmount * monthlyRate / (1 - (1 + monthlyRate)^(-paymentCount)). Monthly recurring costs are calculated as monthlyPropertyTax = homePrice * propertyTaxRate / 100 / 12, monthlyHomeInsurance = homeInsurancePerYear / 12, monthlyPmi = loanAmount * pmiRate / 100 / 12, plus hoaPerMonth and otherCostsPerMonth. monthlyTotalPayment adds all of those monthly amounts. totalPrincipalInterestPaid equals monthlyPrincipalInterest * paymentCount, and totalInterest equals that total minus loanAmount.

Mortgage Calculator formula

This formula page covers the app's full Mortgage Calculator: a fixed-rate principal-and-interest payment plus entered property tax, homeowners insurance, PMI, HOA, and other recurring monthly costs. It does not calculate a Loan Estimate, Closing Disclosure, APR, rate lock, underwriting result, escrow analysis, PMI cancellation schedule, tax bill, insurance quote, HOA statement, closing costs, payoff date, or personalised mortgage advice.

Step by step

1. Read home price, down payment, annual rate, term years, annual property-tax rate, annual homeowners insurance, annual PMI rate, monthly HOA, and other monthly costs from the calculator inputs.
2. Calculate loan amount as home price minus down payment, then floor it at 0 for calculation safety.
3. Calculate down payment percent as down payment divided by home price times 100. If home price is 0, return 0 percent instead of dividing by zero.
4. Convert the entered annual rate to a monthly decimal rate by dividing by 100 and by 12.
5. Convert loan term years to a monthly payment count by multiplying by 12.
6. If the monthly rate is 0, calculate monthly principal and interest as loan amount divided by payment count.
7. Otherwise, calculate monthly principal and interest with Loan times r divided by 1 minus (1 + r) raised to negative n.
8. Convert property tax to a monthly estimate from home price times the entered annual property-tax percentage divided by 12.
9. Convert annual homeowners insurance to a monthly amount by dividing by 12.
10. Convert PMI to a monthly amount from loan amount times the entered annual PMI percentage divided by 12. The app does not automatically turn PMI off at 20 percent down; the entered PMI rate controls the scenario.
11. Add monthly principal and interest, monthly property tax, monthly insurance, monthly PMI, monthly HOA, and other monthly costs to estimate total monthly payment.
12. Calculate total principal and interest paid from the full-precision monthly principal-and-interest payment times payment count.
13. Calculate total interest as total principal and interest paid minus the modeled loan amount.
14. Round displayed currency and percentage outputs to two decimals after the full-precision calculation.
15. Use CFPB mortgage-payment, Loan Estimate, PMI, escrow, Regulation Z, lender, servicer, local tax, insurer, HOA, legal, or local regulator sources before adding official payment, disclosure, escrow, mortgage-insurance, approval, underwriting, tax, insurance, HOA, or jurisdiction-specific claims.

Worked example

Default PMI and no-PMI examples: full monthly mortgage payment

These examples use the app's package fixtures so the numbers match the production formula rather than a generic lender worksheet.

1. Default fixture with PMI: $400,000 home price minus $60,000 down payment creates a $340,000 loan amount and a 15.00 percent down payment.
2. At a 6.5 percent annual rate for 30 years, the monthly rate is about 0.0054167 and the payment count is 360.
3. The fixed-rate formula reports $2,149.03 monthly principal and interest.
4. Monthly property tax is $400.00 from $400,000 times 1.2 percent divided by 12.
5. Monthly homeowners insurance is $125.00 from $1,500 per year divided by 12.
6. Monthly PMI is $170.00 from the $340,000 loan amount times 0.6 percent divided by 12.
7. Adding $75.00 monthly HOA and $0.00 other monthly costs gives a $2,919.03 total monthly payment.
8. Total principal and interest paid is $773,651.26, so total interest is $433,651.26 after subtracting the $340,000 loan amount.
9. No-PMI fixture: a $500,000 home with $100,000 down creates a $400,000 loan amount and 20.00 percent down.
10. At 7 percent for 30 years, the calculator reports $2,661.21 monthly principal and interest.
11. It adds $520.83 monthly property tax, $150.00 monthly insurance, $0.00 PMI, and $125.00 HOA for a $3,457.04 total monthly payment.
12. The no-PMI fixture reports $958,035.59 total principal and interest paid and $558,035.59 total interest.
13. Scoped independent comparator checks pass 4 of 4 monetary scenarios for overlapping outputs. The app intentionally has no payoff-date output and treats HOA and other costs as monthly inputs.

The examples show how the app combines fixed-rate loan math with entered recurring housing-cost assumptions. They do not show what any lender, servicer, insurer, tax authority, HOA, or mortgage-insurance provider will quote, disclose, collect, approve, or change later.

Assumptions and what this calculator ignores

Geographic scope: works globally. The math is currency-agnostic, so enter amounts in your own currency; local taxes, fees, and product rules are not included.

• The model uses a fixed home price, fixed down payment, fixed annual rate, and fixed term. It does not model adjustable rates, interest-only periods, balloon payments, prepayment, refinancing, late fees, servicer escrow changes, payment timing differences, lender underwriting, approval, rate locks, APR, or official disclosure tolerances.
• The cost inputs use simplified units: propertyTaxRate and pmiRate are annual percentages, homeInsurancePerYear is an annual currency amount, and hoaPerMonth and otherCostsPerMonth are monthly currency amounts. The estimate excludes closing costs, lender credits, points, prepaid interest, escrow reserves, tax reassessments, maintenance, utilities, moving costs, repairs, assessments, insurance deductibles, and personal tax outcomes.
• Package fixtures cover both PMI and no-PMI scenarios, and internal independent comparator checks may be used only as validation evidence. CFPB total monthly payment, Loan Estimate, private mortgage insurance, escrow, and Regulation Z Loan Estimate materials are needed before copy discusses official payment components, lender disclosures, mortgage-insurance context, escrow accounts, or legal disclosure fields. Results are educational estimates, not financial, tax, legal, lending, mortgage, consumer-rights, regulatory, or personalised advice.

What this formula does not include

• The result is not a Loan Estimate, Closing Disclosure, APR calculation, rate lock, lender quote, mortgage approval, underwriting result, escrow analysis, tax bill, insurance quote, HOA statement, legal conclusion, or personalised borrowing advice.
• The app models a fixed-rate, level-payment mortgage. It does not model adjustable rates, interest-only periods, balloon payments, negative amortization, late fees, prepayments, refinancing, payment holidays, or servicer payment timing.
• The annual rate input is divided by 12 for payment math. It is not automatically a legal APR with finance charges, points, lender credits, broker fees, prepaid finance charges, or disclosure timing rules.
• Property tax is a simple annual percentage of home price. The app does not look up local assessments, exemptions, reassessments, millage rates, transfer taxes, special assessments, or tax escrow changes.
• Homeowners insurance is entered as an annual amount. The app does not quote hazard, flood, wind, title, mortgage, or lender-placed insurance, and it does not model deductibles or future premium changes.
• PMI is a simplified annual percentage of loan amount. The app does not calculate FHA MIP, VA funding fees, USDA guarantee fees, upfront premiums, borrower-paid versus lender-paid PMI, cancellation timing, or product-specific mortgage-insurance schedules.
• HOA and other costs are entered as monthly amounts. The app does not inspect HOA documents, condo or co-op fees, special assessments, utilities, maintenance, repairs, reserve requirements, or owner-paid bills outside the mortgage payment.
• Closing costs, prepaid interest, escrow reserves, cash needed at closing, points, lender credits, title fees, appraisal fees, inspection costs, legal fees, moving costs, and reserves are outside this formula.
• The app does not determine whether taxes or insurance are escrowed. CFPB and Regulation Z materials distinguish projected payments and taxes, insurance, and assessments, but this calculator is only an educational estimate from entered assumptions.
• Currency and percentage outputs are rounded for display after full-precision calculations, so hand calculations that round each intermediate step can differ by a few cents.
• The result is educational only and does not constitute financial, tax, legal, lending, mortgage, insurance, consumer-rights, regulatory, housing, or personalised advice.

Common mistakes to avoid

• Treating monthly principal and interest as the full housing payment. This calculator adds selected tax, insurance, PMI, HOA, and other monthly costs, while real lender bills and owner-paid costs can still differ.
• Mixing annual and monthly units. Property tax and PMI are entered as annual percentages, home insurance is entered as an annual currency amount, and HOA plus other costs are entered as monthly currency amounts.
• Treating the PMI, tax, insurance, HOA, or escrow-style estimate as a binding lender, insurer, tax authority, servicer, or association figure. Real amounts depend on documents and rules outside this calculator.

Key terms

Total monthly payment

The app's modeled monthly principal and interest plus selected recurring housing-cost assumptions. It is broader than principal and interest, but it is not an official lender payment or complete ownership budget.

PMI rate

The annual private mortgage insurance percentage the app applies to the modeled loan amount. Set it to 0 when your scenario does not include mortgage insurance. Real premiums and cancellation rules depend on the loan and insurer.

Escrow

An account a servicer may use to collect and pay costs such as property taxes and homeowners insurance. This calculator adds tax and insurance assumptions monthly, but it does not determine whether costs are escrowed or how a servicer adjusts them.

Frequently asked questions

Methodology, sources, and disclaimer

This calculator is an original full-payment mortgage model adding entered property tax, homeowners insurance, PMI, HOA, and other monthly costs onto fixed-rate principal and interest, validated by deterministic fixtures, edge cases, and rounding policy tests. It is not copied from a single source.

Fixtures pin the six-component monthly total on the $400,000 default ($2,919.03) and each line's derivation. The result remains an educational estimate, not a lender quote or an escrow analysis.

Formula version 2026.05.22-generic-full-mortgage. The version marks the calculation logic and validation fixture set used for this estimate.

• CFPB mortgage total-monthly-payment materials should be used before copy explains principal and interest, property taxes, homeowners insurance, mortgage insurance, escrow, HOA dues, or total monthly housing-payment boundaries.
• CFPB Loan Estimate and compare Loan Estimates materials should be used before copy discusses official loan amount, projected payments, closing costs, estimated cash to close, lender credits, taxes, insurance, escrow, rate locks, lender forms, or mortgage-offer comparisons.
• CFPB private mortgage insurance materials should be used before copy discusses conventional-loan PMI context, 20 percent down payment framing, PMI payment forms, PMI cost, alternatives, or cancellation timing.
• CFPB escrow or impound account materials and Regulation Z section 1026.37 should be used before copy discusses escrow accounts, estimated taxes and insurance, projected payments, or legal Loan Estimate disclosure fields.
• FHA, VA, USDA, Fannie Mae, Freddie Mac, lender, servicer, mortgage-insurer, title or settlement, local tax authority, insurer, HOA, legal, and state or local regulator sources are needed before copy makes product-specific, jurisdiction-specific, tax, escrow, title, approval, underwriting, APR, legal, consumer-credit, or mortgage-insurance claims.

Results are educational estimates, not advice. Read the full disclaimer.

Related reading

• Mortgage payments in plain English
• How Calcs.finance validates calculator formulas

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