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Mortgage Calculator
Enter home price, down payment (dollars or percent of price), loan term, and interest rate. We compute fixed P&I (principal and interest) with M = P [ i(1 + i)^n ] / [ (1 + i)^n − 1 ] via RapidRatio's high-precision installment path—see why we favor readable decimals. Optional annual property tax and home insurance are divided by 12 the same way and shown in your monthly breakdown.
Quick check: $400,000 home, $80,000 down, 6% APR, 30 years → loan $320,000, P&I about $1,918.56/mo before tax or insurance.
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Results
| Principal & interest (P&I) | — |
|---|---|
| Property tax (mo.) | — |
| Home insurance (mo.) | — |
| Estimated total / month | — |
How Monthly Mortgage Payments are Calculated
Your monthly mortgage payment in this tool has two layers: P&I (principal and interest) is the part that repays the loan and pays the lender’s interest. Principal is the amount borrowed after your down payment; interest is computed each month on the outstanding balance. When you add optional inputs, we also show monthly estimates for property tax and homeowners insurance by splitting each annual figure into twelve equal monthly amounts (annual ÷ 12) with the same high-precision arithmetic as principal and interest. Your real lender may escrow those separately and adjust for taxes due or policy renewals.
How the P&I formula works
For a standard fully amortizing fixed-rate loan, the portion that covers only principal and interest follows a closed form: solve for payment M so the loan balance reaches zero after n payments.
- Loan principal P equals home price minus down payment (down in dollars, or home price × down percent ÷ 100).
- Monthly rate i is annual percent ÷ 100, then ÷ 12 (e.g. 6% → 0.005 per month).
- Months n is loan term in years × 12.
- Payment M = P × [ i (1 + i)^n ] / [ (1 + i)^n − 1 ], or M = P / n if the rate is 0%.
Worked example (sanity check)
Home $400,000, down $80,000, loan $320,000, APR 6%, 30 years → n = 360, i = 0.005, P&I about $1,918.56/month. If you enter $3,600/year tax and $1,200/year insurance, monthly adds about $300 + $100 for a rough $2,318.56 total (exact rows follow the tool’s formatter). PMI is not included.
What this calculator does not include
PMI/MIP, HOA dues, lender fees, discount points, and irregular escrow true-ups are not modeled. Closing costs and APR vs. note rate nuances can differ from a Loan Estimate. Always confirm with your lender.
FAQ
How do you calculate a monthly mortgage payment?
Loan principal P is home price minus down payment. Principal-and-interest uses M = P × [ i (1 + i)^n ] / [ (1 + i)^n − 1 ], where i is the monthly interest rate (annual percent ÷ 100 ÷ 12) and n is months (years × 12). Optional annual property tax and insurance are each divided by 12 with the same precision rules and added for a total monthly estimate. Mortgage insurance (PMI/MIP) is not included here.
How can I lower my monthly mortgage payment?
You can reduce principal and interest by borrowing less (lower price or larger down payment), qualifying for a lower interest rate, or choosing a longer term—though a longer term often increases total interest paid. Escrow-related parts can change if annual property tax or insurance estimates change (for example, reassessment or a new policy), subject to your lender’s escrow rules. This tool does not model lender-specific fees or mortgage insurance.
Does mortgage insurance affect the calculation?
RapidRatio does not add PMI, MIP, or similar mortgage insurance to the breakdown. If your loan requires it, your real monthly payment to the servicer can be higher than the total shown here until insurance drops off or you refinance.
Does this calculator include property taxes and homeowners insurance?
Principal and interest are always computed. You may optionally enter annual property tax and annual homeowners insurance; each is divided by 12 with the same decimal rules used for principal and interest, then added to the payment breakdown. Leave those fields blank or zero for P&I only.
What does RapidRatio use for numeric accuracy?
Typed inputs stay in text form until the calculator evaluates them in a decimal-first workspace. Principal, interest, term, and monthly tax or insurance splits are carried consistently through formatting so stray browser rounding is less likely to affect what you read on the screen.