Mortgage Payment Calculator
Your mortgage payment isn't just one number — it's made up of several pieces, and understanding each one puts you in control. Adjust the numbers below and watch how each piece changes.
In short: a monthly payment usually combines principal, interest, property taxes, and homeowners insurance (PITI) — plus PMI if you put down less than 20%. In some areas, taxes and insurance can be a big slice, so estimate them realistically.
Estimated Monthly Payment
$2,583
Where Your Payment Goes
The Full Picture
Understanding Your Mortgage Payment
Most people think of a mortgage payment as one number, but it's actually four or five things bundled together. Here's what each piece means and why it matters.
Principal — the part that builds wealth
Every month, a portion of your payment goes toward paying down the amount you borrowed. This is the only part of your payment that directly builds your equity — your ownership stake in the home. In the early years of a mortgage, this portion is small (most goes to interest). Over time, it flips. By year 20 of a 30-year mortgage, the majority of your payment is going to principal. That's why people say a mortgage is "forced savings" — every payment increases what you own.
Interest — the cost of borrowing money
Interest is what the lender charges you for using their money. On a $320,000 loan at 6.75%, you'll pay roughly $1,800 in interest in your first month alone. That number drops every month as your balance decreases, but over the full 30 years, you'll pay more in interest than the original loan amount. That's not a scam — that's the math of borrowing over three decades. It's also why even a small rate reduction (say 6.75% to 6.25%) can save you tens of thousands over the life of the loan. Try moving the rate slider above and watch the total interest change.
Property Taxes — paying for your community
Property taxes vary widely by location. In New Jersey, the average effective rate is around 2.2% — among the highest in the country. On a $400,000 home, that's roughly $8,800 per year or $733 per month added to your payment. Your lender typically collects this monthly and holds it in an escrow account, then pays the tax bill on your behalf. Property taxes can change each year based on reassessments and local budgets, so this number isn't fixed forever.
Homeowners Insurance — protecting your investment
Your lender requires homeowners insurance to protect the property (which is their collateral). Costs vary by location, home value, and coverage level, but $1,200 to $2,400 per year is a typical range. Like taxes, this is usually escrowed into your monthly payment. If you're in a flood zone, you'll need separate flood insurance, which can add significantly to this number.
PMI — the cost of putting less than 20% down
Private Mortgage Insurance (PMI) is required when your down payment is less than 20%. It protects the lender (not you) in case you default. PMI typically costs between 0.3% and 1.5% of the loan amount per year, depending on your credit score and down payment. The good news: PMI isn't forever. Once you reach 20% equity in your home — through payments, appreciation, or both — you can request it be removed. At 22% equity, the lender is required to remove it automatically. Try sliding the down payment below 20% above to see how PMI affects your payment.
30 years vs 15 years — what's the trade-off?
A 15-year mortgage has a higher monthly payment but a significantly lower interest rate, and you pay far less total interest. A 30-year mortgage keeps your payment lower and gives you more monthly flexibility. Neither is universally "better." If cash flow is tight, the 30-year makes sense — you can always make extra payments when you have the money. If you can comfortably afford the 15-year payment, you'll save a massive amount in interest and own your home outright in half the time. Click the term buttons above and watch the total interest change — the difference is eye-opening.
Frequently asked questions
What's included in a monthly mortgage payment?
A typical payment has four parts, often called PITI: principal, interest, property taxes, and homeowners insurance. If you put down less than 20% on a conventional loan you may also pay private mortgage insurance (PMI), and a condo or HOA community adds dues. In some areas, taxes and insurance can be a large share of the payment, so it's worth estimating them realistically.
How is the principal and interest portion calculated?
Principal and interest are based on your loan amount, your interest rate, and your loan term (commonly 15 or 30 years) using a standard amortization formula. Early in the loan more of each payment goes to interest; over time more goes to principal. This calculator shows that breakdown so you can see where your money goes.
Does a bigger down payment lower my payment?
Yes. A larger down payment reduces your loan amount, which lowers the principal and interest portion. Reaching 20% down on a conventional loan also removes PMI. Try adjusting the down payment to see how your estimated payment changes.
Are these payment estimates exact?
No. This is an educational estimate, not a quote. Your actual payment depends on your loan program, property taxes, insurance, and credit profile, and will be confirmed when you get real numbers. It does not include every possible cost.
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This calculator is for educational and estimation purposes only. It does not constitute a loan offer, pre-approval, or commitment to lend. Actual rates, payments, and terms will vary.