Buying a home? Use our free Mortgage Calculator to see your full monthly payment, PMI, taxes, insurance, amortization schedule, and how extra payments save interest.
What's in a Monthly Mortgage Payment (PITI)
Many basic calculators only show principal and interest — then buyers are surprised by the real monthly cost. A full US mortgage payment typically includes PITI:
- Principal — the portion that pays down your loan balance
- Interest — the cost of borrowing, calculated on your remaining balance
- Taxes — property taxes, often collected monthly via escrow
- Insurance — homeowners insurance, also often escrowed
Our calculator also adds PMI (when down payment is under 20%) and optional HOA fees so you see the true monthly total, not just P&I.
Understanding PMI
Private Mortgage Insurance (PMI) is generally required when your down payment is less than 20% of the home price. It protects the lender, not you, if you default on the loan.
PMI is one of the most misunderstood costs for first-time buyers — it can add $100–$300+ per month depending on loan size and rate. It can usually be removed once you've built enough equity (typically when your loan balance reaches 80% of the home's value), though exact requirements vary by lender.
Our calculator estimates PMI at a default annual rate of the loan amount and shows when equity conceptually reaches 20% — informational, not a guarantee of removal timing.
Why the Amortization Schedule Matters
In a fixed-rate mortgage, your monthly P&I payment stays the same — but how it's split changes dramatically over time:
- Early months: most of each payment goes to interest (because the balance is highest)
- Later months: most goes to principal as the balance shrinks
Many people expect a 50/50 split throughout the loan. On a $400,000 loan at 6.5%, month one might be roughly $2,167 interest and $361 principal — not even close to half and half. The amortization schedule makes this visible month by month.
Extra Payments — Small Amounts, Big Impact
Paying even a modest extra amount each month — especially early in a 30-year loan — directly reduces the principal balance that future interest is calculated on. That compounds over time: you can cut years off the payoff and save substantial total interest.
Use the extra-payment simulator in our Mortgage Calculator to see the exact months saved and interest avoided for your numbers.
Related Reading
Mortgages are a form of amortized compounding in reverse — similar math to compound growth. Read our compound interest calculator guide for the growth side of the same concept.
Before sizing a mortgage, know your take-home pay — see our paycheck calculator guide and Paycheck Calculator.
Frequently Asked Questions
What does PITI mean in a mortgage payment?
PITI stands for Principal, Interest, Taxes, and Insurance — the four components that typically make up a full monthly mortgage payment, beyond just the loan repayment itself.
Why do I have to pay PMI?
Private Mortgage Insurance is generally required when your down payment is under 20% of the home price. It protects the lender if you default, not you directly, and can usually be removed once you've built enough equity.
Why is most of my early mortgage payment interest instead of principal?
Interest is calculated on your remaining loan balance, which is highest early in the loan — so a larger share of each payment goes to interest at first, gradually shifting toward principal as the balance shrinks.
How much can extra payments actually save?
Even a modest extra amount paid early in a 30-year loan can meaningfully shorten the payoff timeline and reduce total interest, since it directly reduces the balance that future interest is calculated on — the calculator's extra-payment simulator shows the exact effect for your numbers.