How to Calculate Mortgage Payments

Your monthly mortgage payment covers principal and interest (P&I). Property taxes, homeowners insurance, and PMI are separate escrow items.

Step-by-step

1. Determine loan amount: home price minus down payment.
2. Convert annual interest rate to monthly: APR ÷ 12.
3. Calculate total payments: loan term in years × 12.
4. Apply PMT formula: P × [r(1+r)^n] / [(1+r)^n − 1].
5. Add estimated property tax, insurance, and PMI for total monthly housing cost.
6. Use our Mortgage Calculator to model different down payments and rates instantly.

Tips and common mistakes

• A 1% rate difference on $300k costs ~$180/month
• 15-year mortgages have higher payments but far less total interest
• Points buy down rate — calculate break-even in months

Open the Mortgage Calculator to apply these steps with your own numbers instantly.

Frequently asked questions