What your mortgage payment is actually made of
When lenders quote a mortgage rate, they’re usually describing principal and interest — the two components that pay down your loan balance and compensate the lender for lending you the money. But the number that actually leaves your bank account each month is bigger than that, because most mortgage payments also include property taxes and homeowners insurance, bundled together in what’s called PITI (principal, interest, taxes, insurance).
On the example loaded into the calculator above — a $378,000 loan at 6.42% over 30 years — principal and interest come to roughly $2,369 a month. Add an estimated $481 a month for taxes and insurance, and the actual payment is closer to $2,850. That gap is the reason a lot of first-time buyers are surprised by their first mortgage statement.
How much is a mortgage on a house?
The table below shows an estimated monthly payment across a range of home prices, assuming a 20% down payment, a 6.42% 30-year fixed rate, and property tax plus insurance estimated at 1.4% of the home price per year. Your own taxes and insurance will vary by location — use the calculator above with your real numbers for an exact figure.
| Home price | Down payment (20%) | Loan amount | Est. principal & interest | Est. taxes & insurance | Est. total monthly |
|---|---|---|---|---|---|
| $100,000 | $20,000 | $80,000 | $501 | $117 | $618 |
| $200,000 | $40,000 | $160,000 | $1,003 | $233 | $1,236 |
| $300,000 | $60,000 | $240,000 | $1,504 | $350 | $1,854 |
| $400,000 | $80,000 | $320,000 | $2,006 | $467 | $2,472 |
| $500,000 | $100,000 | $400,000 | $2,507 | $583 | $3,091 |
| $600,000 | $120,000 | $480,000 | $3,009 | $700 | $3,709 |
| $700,000 | $140,000 | $560,000 | $3,510 | $817 | $4,327 |
| $800,000 | $160,000 | $640,000 | $4,012 | $933 | $4,945 |
How amortization actually works
Every fixed-rate mortgage payment is the same dollar amount for the life of the loan, but the mix of principal and interest inside that payment shifts every month. Early on, you’re paying mostly interest — in year one of a typical 30-year loan, only a small fraction of what you pay actually reduces the balance. By the later years of the loan, that ratio flips, and most of each payment reduces principal.
This is why paying even a small amount extra toward principal early in a mortgage has an outsized effect on total interest paid over the life of the loan — you’re skipping ahead in a schedule that’s heavily front-loaded with interest. The amortization table above updates with your own numbers, so you can see exactly how your balance declines year by year.
Understanding each input
Home price
The purchase price you’re financing, before any down payment is subtracted. This is the starting point for calculating your loan amount.
Down payment
The portion of the home price you pay upfront in cash. A larger down payment reduces your loan amount, lowers your monthly payment, and — once it reaches 20% on most conventional loans — removes the requirement for private mortgage insurance (PMI).
Interest rate
The annual cost of borrowing, expressed as a percentage. This has the single largest effect on your total cost over the life of the loan — even a 0.25 percentage point difference can change total interest paid by thousands of dollars on a 30-year loan.
Loan term
How many years you have to repay the loan. Shorter terms (15 years) mean higher monthly payments but far less total interest; longer terms (30 years) lower the monthly payment at the cost of paying more interest overall.
Property taxes
Set by your local county or municipality based on your home’s assessed value, typically collected monthly by your lender and held in escrow until the annual tax bill is due. Rates vary significantly by state and county.
Homeowners insurance
Required by nearly all mortgage lenders to protect the home (and their collateral) against fire, storm, and other covered damage. Also usually collected monthly and escrowed.
The mortgage payment formula
Principal and interest are calculated with a standard amortization formula: M = P × [r(1+r)n] / [(1+r)n − 1], where M is the monthly payment, P is the loan amount, r is your monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments (30 years = 360 payments). Your full monthly payment then adds estimated monthly property tax and insurance on top of that principal-and-interest figure.
What moves the number
Four inputs determine your payment: the loan amount, the interest rate, the term, and your tax/insurance estimate. Of these, the interest rate has the largest effect on total cost over time — a single percentage point on a 30-year loan can add tens of thousands of dollars in interest. A larger down payment reduces the loan amount directly and, on many conventional loans, removes the need for private mortgage insurance (PMI) once you cross the 20% equity threshold.
15-year vs. 30-year
A 15-year loan carries a higher monthly payment but a meaningfully lower interest rate and a fraction of the total interest paid, since you’re borrowing the lender’s money for half as long. A 30-year loan lowers the monthly obligation, which increases flexibility, at the cost of paying more in total interest over the life of the loan. Neither is objectively correct — it depends on your monthly cash flow needs versus your priority on minimizing total cost. Toggle between the two terms above to see the difference on your own numbers.
Using this calculator
Adjust the home price, down payment, rate, and term to match your actual numbers, not rounded estimates — a 0.25% difference in rate or a few thousand dollars of down payment changes the monthly payment more than most people expect. The amortization table shows your first five years; the full month-by-month schedule for the entire loan term is available as a CSV download. Every input is reflected in the page URL, so the “copy shareable link” button gives you a link that reproduces your exact numbers for anyone you send it to.
This article is for educational purposes only and isn't legal, financial, or tax advice. See our Disclaimer for details.
