A decision tool, not just an answer.
Use this calculator while comparing home prices, down payments, interest rates, and loan terms. Unlike a basic loan payment, the headline estimate also includes the property tax and homeowners insurance amounts you enter.
- Testing a home-price range before speaking with a lender.
- Comparing the monthly and lifetime effects of different down payments or terms.
- Separating principal and interest from estimated tax and insurance costs.
Formula and calculation method.
Monthly estimate = amortized principal-and-interest payment + annual property tax ÷ 12 + annual home insurance ÷ 12The financed principal is home price minus down payment. Principal and interest use the fixed-payment formula M = P × [i(1 + i)ⁿ] ÷ [(1 + i)ⁿ − 1], where i is the monthly rate and n is the number of monthly payments.
Zero-rate case: At 0% interest, principal and interest equal the financed amount divided by the number of months; entered tax and insurance are still added monthly.
See the result in context.
$360,000 home; $72,000 down; 6.5% for 30 years; $4,500 tax; $1,800 insurance
Working: $288,000 financed, plus $375 monthly tax and $150 monthly insurance
Result: $2,345.36 monthly estimate; $1,820.36 principal and interest
Interpretation: About $525 of the displayed monthly estimate comes from the entered tax and insurance, not loan repayment.
$500,000 home; $100,000 down; 6% for 30 years; $6,000 tax; $2,400 insurance
Working: $400,000 financed, plus $700 per month for tax and insurance
Result: $3,098.20 monthly estimate; $2,398.20 principal and interest
Interpretation: The loan itself accounts for most of the payment, while location-specific ownership costs add $700 monthly.
$300,000 home; $60,000 down; 0% for 15 years; $3,600 tax; $1,200 insurance
Working: $240,000 ÷ 180 months, plus $400 monthly tax and insurance
Result: $1,733.33 monthly estimate; $0 loan interest
Interpretation: This edge case shows that taxes and insurance remain even when financing has no interest.
Assumptions and common mistakes.
What the estimate assumes
- The mortgage rate is fixed and principal-and-interest payments are monthly.
- Property tax and insurance are divided evenly across 12 months and remain constant.
- The down payment is paid upfront and is not part of the financed principal.
- The loan is fully amortizing with no interest-only period or balloon balance.
Mistakes to avoid
- Comparing only principal and interest while overlooking tax, insurance, HOA dues, or mortgage insurance.
- Entering an APR as the interest rate even though APR may include lender fees.
- Assuming property taxes and insurance will stay unchanged for 15 or 30 years.
- Treating preapproval as proof that the resulting payment is comfortable for the household budget.
What unusual inputs mean.
The financed principal is zero, so the estimate contains only the entered monthly tax and insurance.
The calculator rejects this because it would create a negative mortgage principal.
The result becomes a principal-and-interest estimate only; it is not a complete cost of homeownership.
How to use this calculator.
- Enter the expected purchase price and the cash down payment. The difference is the financed principal.
- Enter the annual note rate and loan term. Use the lender’s quoted fixed rate rather than an APR that includes fees.
- Enter annual property tax and homeowners insurance estimates for the property and location.
- Review the combined monthly estimate, then check the principal-and-interest amount and lifetime loan interest separately.
What the estimate leaves out.
The estimate excludes private mortgage insurance, HOA dues, flood insurance, closing costs, points, maintenance, utilities, rate changes, adjustable-rate resets, and jurisdiction-specific escrow rules. “Loan total paid” covers principal and interest only; it does not add decades of tax or insurance.
Questions people ask.
What does the monthly mortgage estimate include?
It includes the calculated principal-and-interest payment plus one-twelfth of the annual property tax and home insurance amounts entered. It does not automatically include mortgage insurance, HOA dues, or maintenance.
How does the down payment affect the mortgage?
A larger down payment reduces the financed principal, which generally lowers the principal-and-interest payment and lifetime interest. It may also affect mortgage-insurance requirements, which are not calculated here.
Are property taxes and insurance part of total loan interest?
No. The total loan interest and loan total paid figures refer only to the mortgage principal and interest. Tax and insurance appear in the monthly estimate but are not projected across the full term.
Does this calculator include PMI?
No. Private mortgage insurance depends on the loan program, down payment, lender, and later loan-to-value changes. Add a lender-provided PMI estimate separately when building a complete budget.
Should I enter the mortgage rate or APR?
Enter the note interest rate used to calculate scheduled payments. APR may include points and certain fees, so it can be useful for comparing offers but does not directly replace the note rate in this payment formula.
Why can the actual escrow payment change?
Property assessments, tax rates, insurance premiums, and escrow analyses can change after closing. The calculator holds your entered annual amounts constant for a present-day estimate.
Does a 15-year mortgage always cost less than a 30-year mortgage?
A shorter term usually reduces lifetime interest but requires a larger monthly principal-and-interest payment. Compare affordability, rate differences, and other financial priorities before choosing.