Property tax and insurance are held at today's amounts; in practice both usually rise over time.
You borrow $360,000.00 and pay $2,917.11 in the first month, of which $2,275.44 is principal and interest. Over 360 months interest adds $459,160.16 (127.5% of the loan), and PMI stops after month 95.
First month's payment
Principal and interest78.0%Property tax12.6%Insurance4.3%PMI5.1%
Loan balance
Paid each year
PrincipalInterestTax, insurance, HOAPMI
Amortization schedule Rows: 360
Month
Principal + interest
Principal
Interest
PMI
Tax, insurance, HOA
Balance
1
$2,275.44
$325.44
$1,950.00
$150.00
$491.67
$359,674.56
2
$2,275.44
$327.21
$1,948.24
$150.00
$491.67
$359,347.35
3
$2,275.44
$328.98
$1,946.46
$150.00
$491.67
$359,018.37
4
$2,275.44
$330.76
$1,944.68
$150.00
$491.67
$358,687.61
5
$2,275.44
$332.55
$1,942.89
$150.00
$491.67
$358,355.05
6
$2,275.44
$334.36
$1,941.09
$150.00
$491.67
$358,020.70
7
$2,275.44
$336.17
$1,939.28
$150.00
$491.67
$357,684.53
8
$2,275.44
$337.99
$1,937.46
$150.00
$491.67
$357,346.54
9
$2,275.44
$339.82
$1,935.63
$150.00
$491.67
$357,006.73
10
$2,275.44
$341.66
$1,933.79
$150.00
$491.67
$356,665.07
11
$2,275.44
$343.51
$1,931.94
$150.00
$491.67
$356,321.56
12
$2,275.44
$345.37
$1,930.08
$150.00
$491.67
$355,976.19
How it's calculated S
Loan amount
L=400,000.00×(1−10010)=360,000.00
Monthly rate and number of payments
r=12006.5=0.005416666667,n=30×12=360
Principal and interest
(1+r)360−1360,000.00×r×(1+r)360=2,275.44
Tax, insurance and HOA
121.1%×400,000.00+121,500.00+0.00=491.67
PMI
120.5%×360,000.00=150.00while balance>320,000.00
Charged for 95 months, until the balance falls to 80% of the price or the loan's midpoint, whichever comes first.
Total monthly payment
2,275.44+491.67+150.00=2,917.11
Rounded half-to-even to cents for display; the schedule uses unrounded amounts and the last payment clears any residual.
About the mortgage calculator
A mortgage payment has two parts. Principal and interest come from the annuity formula M = L × r × (1 + r)^n ÷ ((1 + r)^n − 1), where L is the loan amount, r the monthly rate and n the number of payments. Property tax, homeowners insurance, HOA dues and private mortgage insurance (PMI) are added on top; lenders often collect tax and insurance through escrow, and the four main items are called PITI.
With the defaults, a 400,000 home bought with 10% down at 6.5% for 30 years, principal and interest are 2,275.44 a month and the first full payment is 2,917.11, including 366.67 of property tax, 125.00 of insurance and 150.00 of PMI. Interest over the whole term is 459,160.16.
PMI is charged until the balance reaches 80% of the price, the point at which US borrowers can ask for it to be cancelled, and never past the loan's midpoint. Tax and insurance are held at today's amounts.
Monthly payment on a 400,000 home
At 6.5% over 30 years, a 400,000 home has a first monthly payment of 2,917.11 with 10% down and 2,514.28 with 20% down, including tax, insurance and any PMI. The larger down payment also removes PMI and cuts total interest by 51,017.80.
Each row changes one choice. Property tax is 1.1% of the price a year, insurance 1,500 a year, PMI 0.5% of the loan a year and HOA dues zero. Interest is the total over the life of the loan:
Down payment
Term, years
Extra monthly
Principal/interest
First monthly total
Payoff months
Interest
10%
30
0.00
2275.44
2917.11
360
459160.16
10%
15
0.00
3135.99
3777.65
180
204477.57
20%
30
0.00
2022.62
2514.28
360
408142.36
10%
30
200.00
2275.44
2917.11
287
350243.31
10%
30
5000.00
2275.44
2917.11
58
60214.91
The first monthly total leaves out the extra principal, so the 200 row costs 3,117.11 a month in cash and the 5,000 row 7,917.11.
Paying 200 extra each month clears the loan in 287 months, 23 years 11 months, and saves 108,916.85 of interest.
How the mortgage payment is calculated
Principal and interest follow M = L × r × (1 + r)^n ÷ ((1 + r)^n − 1), where L is the loan, r the monthly rate and n the number of payments. A 300,000 loan at 7.03% for 30 years costs 2,001.96 a month. Property tax, insurance, HOA dues and PMI are added on top.
Mortgage payment worked by hand
Take a 375,000 home bought with 20% down, which leaves a loan of 300,000, at 7.03% for 30 years. That rate was Freddie Mac's average for a 30-year fixed mortgage in the survey published on 24 September 2026 (Primary Mortgage Market Survey).
Adding 1.1% property tax (375,000 × 0.011 ÷ 12 = 343.75) and 1,500 a year of homeowners insurance (125.00) gives a first monthly payment of 2,470.71. In Excel, =PMT(7.03%/12, 360, -300000) returns the same 2,001.96 for principal and interest.
Keep every digit of r until the end. Rounding it to 0.00586 before raising it to the 360th power makes the payment 2,002.36: 40 cents a month and about 145 over the loan.
How amortization splits each payment
Each month's interest is the balance times r, and the rest of the payment repays principal. Because the balance falls slowly at first, early payments are mostly interest. This excerpt of the schedule is for the 300,000 loan above:
Payment
Interest
Principal
Balance after
1
1,757.50
244.46
299,755.54
12
1,741.28
260.68
296,970.14
60
1,656.91
345.04
282,485.12
120
1,512.09
489.87
257,618.54
180
1,306.47
695.49
222,314.43
240
1,014.54
987.41
172,191.74
300
600.08
1,401.87
101,030.51
360
11.66
1,990.30
0.00
In the first five years you pay 102,602.45 of interest and repay only 17,514.88 of the loan. Principal first exceeds interest in payment 243, and the balance drops below half the loan after payment 262, almost 22 years in.
Total interest is 420,703.98, 1.4 times the amount borrowed. If you expect to sell or refinance within a few years, the balance column, not the payment, shows how much equity you will have.
Property tax, insurance and escrow
Principal, interest, taxes and insurance together are called PITI. A lender that sets up an escrow account collects the tax and insurance with each payment and pays the bills when they fall due.
In the US, Regulation X lets the servicer collect one-twelfth of the expected yearly bills plus a cushion of no more than one-sixth of them (12 CFR 1024.17(c)). With 5,625 a year of tax and insurance, the cushion can reach 937.50.
The escrow payment changes when the tax bill or premium changes (CFPB), so a first-year figure is a starting point, not a fixed cost.
When PMI applies and when it ends
A lender may require private mortgage insurance (PMI) on a conventional loan with less than 20% down (CFPB). With 5% down on the same home, the loan is 356,250, principal and interest are 2,377.32, and PMI at 0.5% a year adds 148.44 a month.
The balance reaches 80% of the price (300,000) after payment 130, when PMI has cost 19,296.88. Under US rules you can then ask in writing to cancel it.
If you never ask, the servicer must end PMI when the balance is scheduled to reach 78%, after payment 142: 12 more months and 1,781.25.
The CFPB defines original value as the lower of the sale price and the appraisal. A low appraisal therefore moves the 80% point later than a price-based schedule shows.
15-year vs 30-year mortgage
In the same Freddie Mac survey the 15-year average was 6.42%, 0.61 points below the 30-year rate. On the 300,000 loan:
Loan detail
30 years at 7.03%
15 years at 6.42%
Monthly principal and interest
2,001.96
2,600.15
Total interest
420,703.98
168,026.36
Balance after 5 years
282,485.12
229,813.97
Balance after 10 years
257,618.54
133,144.90
The 15-year loan costs 598.19 more a month and 252,677.62 less in interest. Most of that saving comes from the shorter term: at 7.03% over 15 years, interest would be 186,273.42, so the lower rate saves a further 18,247.06.
The 30-year loan's lower required payment leaves slack if income falls, and extra payments on it recover part of the gap, as shown below.
How the interest rate changes your payment
For a 300,000 loan:
Rate
30-year payment
30-year interest
15-year payment
15-year interest
5.0%
1,610.46
279,767.35
2,372.38
127,028.56
5.5%
1,703.37
313,212.12
2,451.25
141,225.07
6.0%
1,798.65
347,514.57
2,531.57
155,682.69
6.5%
1,896.20
382,633.47
2,613.32
170,397.98
7.0%
1,995.91
418,526.69
2,696.48
185,367.27
7.5%
2,097.64
455,151.67
2,781.04
200,586.67
8.0%
2,201.29
492,465.74
2,866.96
216,052.13
On the 30-year loan each half point adds 93 to 104 a month and 33,400 to 37,300 of interest over the term. Payments scale with the loan, so for 450,000 multiply any row by 1.5.
The payment comes from the note rate. The APR also spreads points and fees over the loan, so it is usually higher than the rate (CFPB). Compare offers on both: the rate for the payment, the APR for the cost of fees.
Extra payments and biweekly plans
Extra principal lowers the balance that every later month's interest is charged on. On the 300,000 loan at 7.03%:
Extra each month
Paid off after
Total interest
Interest saved
0
360 months
420,703.98
none
100
310 months
350,842.61
69,861.38
166.83
285 months
317,318.78
103,385.20
250
260 months
284,497.92
136,206.07
500
208 months
219,207.93
201,496.06
The 166.83 row is one-twelfth of the monthly payment, which adds up to one extra payment a year. A biweekly plan, paying half the payment every two weeks, makes 26 half-payments a year and has close to the same effect.
Check the loan note for a prepayment penalty before paying extra.
Mistakes that skew the result
Treating the first payment as permanent. The total falls by the PMI amount once PMI ends, and escrow is reset whenever tax or insurance bills change.
Ignoring rate resets. The payment formula assumes one fixed rate. For an adjustable-rate loan, work out the fixed period, then again at a plausible reset rate.
Entering a Canadian rate as quoted. Canadian fixed rates compound half-yearly, so they need converting first, as the next section shows.
Canadian mortgages and other currencies
Canada's Interest Act requires a blended-payment mortgage to state its rate "calculated yearly or half-yearly, not in advance" (section 6). Convert it to monthly compounding with 12 × ((1 + rate ÷ 2)^(1/6) − 1): 5.00% becomes 4.9487%.
On 300,000 over 25 years, that is 1,744.81 a month, not the 1,753.77 that 5% compounded monthly gives.
Canadian mortgage loan insurance is typically required with less than 20% down (FCAC). It is a one-time premium, a percentage of the mortgage, paid as a lump sum or added to the loan (CMHC), so treat it as part of the loan, not as monthly PMI.
The Canadian mortgage calculator handles half-yearly compounding and the premium directly. Elsewhere the annuity formula is the same in any currency; for a home loan in India or the UK, the loan EMI calculator adds tenure in months and one-off prepayments.
Checked against: Annuity payment formula, closed-form balance L(1+r)^k − M((1+r)^k − 1)/r to find the first month at or below 80% of price; total interest = 360M − L
20% down: PMI never applies
Home price
400,000
Down payment
20%
Interest rate (per year)
6.5%
Loan term
30 years
Property tax (per year, of home price)
1.1%
Homeowners insurance (per year)
1500
HOA dues (per month)
0
PMI (per year, of loan amount)
0.5%
Extra principal every month
0
Principal and interest
2,022.62
Total monthly payment
2,514.28
PMI per month
0.00
Months of PMI
0
Loan amount
320,000.00
Checked against: Annuity formula: 320,000 at 6.5%/12 over 360 months = 2,022.62; balance starts at the 80% line so no PMI
Checked against: The balance first reaches 80,000 after payment 209, so the Homeowners Protection Act midpoint (month 180) ends PMI; 180 × 41.67
Questions
How is a monthly mortgage payment calculated?
Principal and interest come from the annuity formula; one-twelfth of the yearly property tax and insurance, HOA dues and PMI are added on top. For a 360,000 loan at 6.5% over 30 years, r = 6.5 ÷ 1,200 and n = 360, so principal and interest are 2,275.44. Adding 1.1% tax on a 400,000 home (366.67), 1,500 a year of insurance (125.00) and 0.5% PMI (150.00) gives 2,917.11.
When can I stop paying PMI?
In the US you can ask your servicer in writing to cancel PMI once the balance is scheduled to reach 80% of the home's original value, if you are current on payments and the value has not declined. PMI ends automatically at 78%, and at the loan's midpoint in any case (CFPB, Homeowners Protection Act). On the default 30-year loan, 80% is reached after payment 95 and 78% after payment 109.
Is a 15-year or a 30-year mortgage cheaper?
A 15-year mortgage costs much less interest but has a higher monthly payment. Borrowing 360,000 at 6.5% over 30 years costs 2,275.44 a month and 459,160.16 in interest; over 15 years the payment rises to 3,135.99 and interest falls to 204,477.57, about 55% less. A lower rate on the 15-year loan widens the gap further.
How much does paying extra on a mortgage save?
Extra payments go straight to principal, so they cut both the interest and the term. Adding 200 a month to the default 360,000 loan at 6.5% pays it off in 287 months instead of 360 and saves 108,916.85 in interest. PMI also ends after 64 months instead of 95. Check your loan terms for a prepayment penalty before paying extra.
How much down payment do I need to avoid PMI?
20% of the price for a conventional loan, because the loan then starts at 80% of the home's value. On a 400,000 home, 20% down (80,000) leaves a 320,000 loan costing 2,022.62 a month in principal and interest at 6.5%, with no PMI. With 10% down the same home costs 2,275.44 plus 150.00 of PMI a month.
About this calculator
M=(1+r)n−1Lr(1+r)n+12tax×price+12insurance+HOA+while balance>0.8price and month≤n/212PMI×L
For planning only. Lenders, tax authorities and markets apply their own rounding, fees and rules; confirm figures with them before you commit.
Checked against references
This calculator includes 5 worked examples with independently sourced answers. They run in the test suite, and you can run them here too.
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