Mortgage Calculator
How it works
The loan amount is simply the home price minus the down payment. That loan is then amortized the same way any fixed-rate loan is: the monthly rate r and the number of payments n feed into M = loanAmount · r · (1+r)ⁿ / ((1+r)ⁿ − 1), the fixed payment that pays off exactly that principal, at exactly that rate, in exactly that many months. At a 0% rate the same payment is just loanAmount / n, since there is no interest to spread across the term.
Property tax and insurance are entered as yearly figures because that is how they are usually billed or quoted, so each is divided by 12 to get its monthly share. PMI is asked for directly as a monthly amount, since it is typically quoted that way by lenders. All three are added on top of the loan payment rather than folded into it — they do not reduce what you owe on the loan, so total interest is calculated from the loan payment alone, not from the full monthly payment.
Frequently asked questions
Why does PMI show up at all — isn't that optional?
Private mortgage insurance is charged by most lenders whenever the down payment is under 20% of the home price, because a smaller down payment means the loan is a bigger share of the home's value if the lender ever has to foreclose. It protects the lender, not you, and it typically drops off once enough principal is paid down — this calculator asks for it directly rather than guessing your lender's rate, since PMI terms vary widely.
Are the property tax and insurance figures accurate?
Only as accurate as what you enter. Property tax depends on your local rate and the home's assessed value, and home insurance depends on the insurer, the home and your coverage choices — neither is something a formula can look up. Treat both as estimates to plan around, and confirm the real figures with your county assessor and an insurance quote before relying on them.
How is this different from a plain loan calculator?
A loan or EMI calculator answers one question: what is the payment on the loan amount, rate and term. A mortgage payment usually bundles three more costs alongside it — property tax, homeowners insurance and sometimes PMI — that a lender collects through an escrow account and pays on your behalf. This calculator adds those in so the total shown is what actually leaves your bank account each month, not just the loan piece of it.