Mortgage Calculator withAI-Powered Advice
Calculate your monthly mortgage payment, view detailed amortization schedule, and receive personalized AI recommendations for your home loan. Includes taxes, insurance, PMI, and optimization strategies.
Mortgage Calculator
Calculate your monthly mortgage payment including principal, interest, taxes, insurance, and PMI
Additional Monthly Costs
Understanding Mortgage Calculations
Monthly Payment Formula
Monthly payment is calculated using the standard amortization formula: M = P[r(1+r)^n]/[(1+r)^n-1]
- • M = Monthly payment
- • P = Principal loan amount
- • r = Monthly interest rate
- • n = Number of payments
PMI Requirements
Private Mortgage Insurance (PMI) is required when down payment is less than 20% of home price.
- • Typical cost: 0.3% to 1.5% annually
- • Removable at 20% equity
- • Automatic removal at 22% equity
- • Can be avoided with 20%+ down
Affordability Rules
International lending standards for mortgage affordability and debt-to-income ratios.
- • 28% rule: Housing ≤ 28% of gross income
- • 36% rule: Total debt ≤ 36% of income
- • DTI up to 43% with strong credit
- • Consider all monthly obligations
Mortgage Calculator FAQ
How is monthly mortgage payment calculated?
Monthly mortgage payment is calculated using the standard amortization formula: M = P[r(1+r)^n]/[(1+r)^n-1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (loan term × 12).
What is included in total monthly housing payment?
Total monthly housing payment includes principal and interest (P&I), property taxes, homeowners insurance, private mortgage insurance (PMI) if down payment is less than 20%, and HOA fees if applicable. This is often called "PITI" (Principal, Interest, Taxes, Insurance).
When can I remove PMI from my mortgage?
PMI can typically be removed when you reach 20% equity in your home through loan payments or property appreciation. By law, lenders must automatically cancel PMI when you reach 22% equity. You can also request removal at 20% equity with a new appraisal.
Should I make extra mortgage payments?
Extra mortgage payments can save significant interest and shorten your loan term. However, consider maximizing employer 401(k) matching, paying off high-interest debt (credit cards), and building an emergency fund first. Extra payments make most sense when mortgage rates exceed other investment returns.
What mortgage term should I choose: 15-year or 30-year?
15-year mortgages have higher monthly payments but lower total interest and faster equity building. 30-year mortgages have lower monthly payments but higher total interest costs. Choose based on your cash flow needs, other financial goals, and current interest rate environment.