Understanding Mortgage Payments
How to Use the Mortgage Calculator
Our comprehensive mortgage calculator helps you estimate your monthly home loan payments. Enter your home price, down payment, loan term, and interest rate. You can also include property taxes, homeowners insurance, PMI, and HOA fees for a complete picture of your total monthly housing costs.
What's Included in Your Mortgage Payment?
- Principal: The amount borrowed to purchase the home
- Interest: The cost of borrowing money from the lender
- Property Taxes: Annual taxes on your property, paid monthly to lender
- Homeowners Insurance: Required insurance coverage for your home
- PMI: Private Mortgage Insurance (required if down payment is less than 20%)
- HOA Fees: Homeowners Association fees (if applicable)
Understanding PMI (Private Mortgage Insurance)
PMI is required by lenders when your down payment is less than 20% of the home's purchase price. This insurance protects the lender if you default on the loan. PMI typically costs 0.5% to 1% of the loan amount annually and can be removed once you've built 20% equity in your home.
Tips for Lower Mortgage Payments
- Save for a larger down payment (20% or more to avoid PMI)
- Improve your credit score for better interest rates
- Consider a shorter loan term (15 or 20 years)
- Shop around with multiple lenders for the best rates
- Make extra principal payments when possible