Our Mortgage Calculator includes key factors like homeowners association fees, property taxes, and private mortgage insurance. Get the whole picture and calculate your total monthly payment.
Monthly payment breakdown
Principal & interest
How to calculate mortgage payments
Your monthly mortgage costs include more than just loan payments and interest. So you can really crunch the numbers, we’ve included all the typical monthly costs you’ll be responsible for once you own a home.
Play around with different home prices, locations, down payments, interest rates, and mortgage lengths to see how they impact your monthly mortgage payments.
If you enter a down payment amount that’s less than 20% of the home price, private mortgage insurance (PMI) costs will be added to your monthly mortgage payment. As the costs of utilities can vary from county to county, we’ve included a utilities estimate that you can break down by service. If you’re thinking about buying a condo or into a community with a Homeowners Association (HOA), you can add HOA fees.
The only amounts we haven’t included are the money you’ll need to save for annual home maintenance/repairs or the costs of home improvements. To see how much home you can afford including these costs, take a look at the Better home affordability calculator.
Fun fact: Property tax rates are extremely localized, so 2 homes of roughly the same size and quality on either side of a municipal border could have very different tax rates. Buying in an area with a lower property tax rate may make it easier for you to afford a higher-priced home.
Ways this free mortgage calculator is different
This mortgage calculator shows your payments with taxes and insurance
When you own a home, you’re responsible for paying property taxes and homeowners insurance. Often these costs will be rolled in with your mortgage payments as it’s important—to both you and your lender—that these bills stay current to protect your investment.
The property taxes you pay help fund the services your local government provides for the community. These services include schools, libraries, roads, parks, water treatment, the police, and the fire department. Once your mortgage is paid off, you’ll still be required to pay property taxes. If you fall behind on your property taxes, you could end up losing your home to your local tax authority.
Your lender will typically insist on you having homeowners insurance while you’re paying off your mortgage. Lenders do this because they know from experience that no one wants to pay a mortgage on a property that’s burned down, damaged, or destroyed.
Fun fact: When you own your home free and clear, the decision to keep homeowners insurance is all yours. However, to ensure your home is covered for damage caused by fires, lightning strikes, and natural disasters that can affect your area, most people would recommend keeping it.
This mortgage calculator shows your mortgage costs with PMI
PMI, short for private mortgage insurance, helps homebuyers qualify for a mortgage without making a 20% down payment. By making a smaller down payment and selecting a mortgage with PMI, you can buy sooner and start building equity in your home while keeping cash in a savings account for when you need it.
Choosing a mortgage with PMI is a popular option: 71% of first-time homebuyers had a down payment of less than 20% in July 2021. In 2020, the median down payment for first-time homebuyers was just 7%, and it hasn’t risen above 10% since 1989.
PMI is automatically removed from conventional mortgages once the equity in your home reaches 22%. Alternatively, once you’ve earned at least 20% home equity, you can ask for PMI to be removed.
This mortgage calculator includes HOA fees
Homeowners association fees are typically charged directly by a homeowners association, but as HOA fees come part and parcel with condos, townhomes, and planned housing developments, they’re an essential factor to consider when calculating your mortgage costs.
Homes that share structural elements, like roofs and walls or community elements such as landscaping, pools, or BBQs, typically require homeowners to pay HOA fees to maintain the upkeep of these amenities. While you’re still in your budget planning stage, it’s good to remember that HOA fees typically increase annually. HOAs may also charge additional fees known as ‘special assessments’ to cover unexpected expenses from time to time.
How to reduce your monthly mortgage payments
The less you spend on the home’s purchase price, the lower your loan amount will be. But if the seller is less than willing to cut you a deal, you have other options.
Extend the length of your mortgage
The more time you have to pay off the mortgage, the less each monthly mortgage payment will be. (In lender-speak, ‘extending the length of your mortgage’ is known as ‘increasing your loan term’.) This is why people often choose a 30-year fixed rate mortgage over one with a 15- or 20-year term.
Increase your down payment
The smaller the amount of your mortgage, the smaller your monthly payments. If you’re able to put at least 20% of the home price towards your down payment, you’ll be able to avoid PMI. Even if you can’t afford a complete 20% down payment, boosting your down payment will help you get PMI removed sooner. In fact, boosting your down payment by 5% can lower your monthly PMI fees.
Get a lower interest rate
Increasing your down payment can be one way to help you qualify for a lower interest rate. The amount of your down payment compared to the total amount of the loan is called your loan-to-value ratio (LTV). Depending on your loan amount, a lower LTV may increase the likelihood of you of being offered a low interest rate.
If you intend on keeping your home for a while, you could consider buying points to reduce your interest rate. Buying points essentially means you agree to pay more upfront costs in exchange for a lower monthly payment.
If you think you may sell or refinance the home in the first 5-10 years of the mortgage, you could consider an adjustable-rate mortgage (ARM). An ARM offers a low fixed interest rate for a set introductory period—typically 5, 7, or 10 years. Once the set introductory period ends, the interest rate adjusts (sometimes it goes up, sometimes down). The introductory interest rate for ARMs is typically lower than the interest rate for a conventional fixed-rate mortgage which makes it a great way to save on interest if you know you won’t keep the mortgage for long.
If you’re not planning on buying a home for a while, improving your credit score is a tried and true way of increasing your chances of qualifying for a lower interest rate. By reducing your debt-to-income ratio (DTI), lenders will see that you comfortably afford your mortgage and be more willing to offer a lower interest rate.
Next steps to buying a house
There are 8 steps to buying a house and by using this calculator you’ve completed step 2 (calculating your home affordability) and maybe even step 1 (getting your finances in order).
The next step is getting pre-approved. A mortgage pre-approval with Better Mortgage takes as little as 3-minutes and doesn’t impact your credit score. It’s a free no-commitment way to see how much home you can buy, the mortgages you qualify for, and the range of interest rates you’ll be offered.
If you’re ready to buy a home now, our definitive homebuying checklist can walk you through everything you need to know to get the home you want. With your Better Mortgage pre-approval letter in hand, you’ll be able to show sellers and real estate agents that you mean business—giving you an edge over homebuyers that don’t have this kind of proof that they’re financially ready to purchase. And by working with an agent from Better Real Estate and funding with Better Mortgage, you’ll save $2,000 on closing costs, and save up to $8,200 on average over the life of your loan.**
**The average lifetime savings estimate is based on a comparison of the Freddie Mac Primary Mortgage Market Survey’s (PMMS) 30-year fixed-rate mortgage product with Better Mortgage’s own offered rate for a comparable mortgage product between Jan ‘20 - Dec ‘20. PMMS is based on conventional, conforming fully-amortizing home purchase loans for borrowers with a loan-to-value of 80 percent and with excellent credit. Better Mortgage’s offered rate is based on pricing output for a 30-year fixed-rate mortgage product with a 30-day lock period for a single-family, owner-occupied residential property and a borrower with excellent (760 FICO) credit and a loan-to-value ratio of 80 percent. Individual savings could vary based on current market rates, property type, loan amount, loan-to-value, credit score, debt-to-income ratio and other variables.