Mortgage Payment Calculator (Monthly) 🌎

The amortization formula every US mortgage uses

Whether you're sitting in front of a Rocket Mortgage loan officer, a credit union, or a community bank, the principal-and-interest portion of your monthly payment is calculated the exact same way. It is the standard amortization formula:

M = P × [r(1+r)^n] / [(1+r)^n − 1]

Where:
  M = monthly P&I payment (USD)
  P = principal loan amount (home price − down payment)
  r = monthly interest rate = annual rate / 12
  n = total number of payments = loan term in years × 12

Worked example — $400,000 loan, 30-year fixed, 6.5%

Let's run a clean 2026 example. You buy a $500,000 home with 20% down, financing $400,000 on a 30-year fixed at 6.5%.

Total of payments = $2,528 × 360 = $910,080. Total interest paid = $910,080 − $400,000 = $510,080. That number — half a million in interest on a $400k loan — is why so many buyers run a 15-year scenario before signing.

PITI: the four components your lender actually cares about

Lenders qualify you on the full PITI figure, not just P&I, because property taxes and homeowners insurance are real cash obligations they don't want you missing.

If you put less than 20% down on a conventional loan or take an FHA loan, your lender will require an escrow / impound account: every month they collect 1/12 of your annual property-tax bill and 1/12 of your annual insurance premium along with your P&I, then pay those bills on your behalf when they come due. Once a year your escrow is reanalyzed, which is why your payment can drift up $50–$150/month even on a fixed-rate loan.

Property taxes vary wildly by state

Property tax is the line item that surprises buyers the most when they relocate.

These are statewide effective averages from the Tax Foundation; your specific county/municipality can be meaningfully higher or lower, and always verify with the county assessor's website before committing to a purchase.

Homeowners insurance — typical 2026 ranges

Nationally, homeowners insurance for a $300k–$500k home runs roughly $1,400–$2,500 per year, but it's wildly geography-dependent: Florida and Louisiana (hurricane), California (wildfire), and parts of Oklahoma/Texas (severe storm) are 2x–4x the national average. Coastal Florida policies for the same home value can clear $5,000–$8,000/year before windstorm endorsements.

PMI: cost, mechanics, and how to get rid of it

On conventional loans with less than 20% down, expect PMI of 0.5%–1.5% of the loan balance per year, priced primarily off your FICO score and LTV. On a $400,000 loan, 0.8% PMI = $3,200/year = $267/month added to your payment.

Under the Homeowners Protection Act of 1998, lenders must:

You can also accelerate PMI removal by paying down principal aggressively or, after ~2 years, by ordering a new appraisal if home values in your area have risen.

FHA MIP is different — it doesn't go away

FHA loans charge two separate mortgage-insurance premiums:

For most FHA loans originated today with less than 10% down, annual MIP lasts the entire life of the loan. The standard exit strategy is to refinance into a conventional loan once you've built 20% equity.

Conventional 80/20 vs. 80/10/10 piggyback

If you have 10% down but want to avoid PMI, lenders sometimes still offer the classic 80/10/10 piggyback: an 80% LTV first mortgage, a 10% HELOC or second lien, and 10% cash down. You skip PMI on the first, but the second lien usually carries a higher rate (often prime + 1–3%). Run both scenarios in this calculator — sometimes the piggyback wins, sometimes paying PMI for 4–6 years until you refi is cheaper.

Refinance break-even math

The refinance decision is mostly arithmetic. If a refi saves you $220/month and costs $5,500 in closing costs, your break-even is $5,500 ÷ $220 ≈ 25 months. If you'll stay in the home longer than that, the refi pencils. Add a comfort buffer — most borrowers want break-even under 36 months and a rate drop of at least 0.50%–0.75% before pulling the trigger.

Discount points and rate buy-downs

One discount point = 1% of the loan amount paid at closing in exchange for roughly a 0.25% rate reduction (this ratio varies by lender and market). On a $400k loan, one point costs $4,000. If it drops your rate from 6.75% to 6.50%, that's roughly $66/month in P&I savings, for a break-even around 60 months. Points generally only make sense if you're confident you'll hold the loan well past break-even and you're not planning to refinance.