What is a good down payment for a house?

A 20% down payment is widely recommended because it eliminates the need for Private Mortgage Insurance (PMI), which typically adds 0.5%–1.5% of the loan amount per year to your payment. However, many loan programs allow down payments as low as 3% (conventional) or 3.5% (FHA). A larger down payment lowers your monthly payment, reduces total interest paid, and builds equity faster — but you should weigh that against keeping cash reserves for emergencies.

What is the difference between a 15-year and 30-year mortgage?

A 30-year mortgage has a lower monthly payment but you pay significantly more interest over the life of the loan. A 15-year mortgage has a higher monthly payment (typically 25–40% more) but you pay off your home in half the time and pay roughly 50–60% less in total interest. For example, on a $300,000 loan at 7%, a 30-year term costs about $418,000 in total interest while a 15-year term costs about $186,000 — a difference of over $230,000.

What does PITI stand for in a mortgage payment?

PITI stands for Principal, Interest, Taxes, and Insurance — the four components that typically make up a full monthly mortgage payment. Principal is the portion that reduces your loan balance. Interest is the cost of borrowing. Taxes refers to property taxes, usually collected monthly into an escrow account. Insurance includes homeowners insurance and, if your down payment is under 20%, Private Mortgage Insurance (PMI). Lenders use PITI to calculate your debt-to-income ratio when qualifying you for a loan.

Mortgage Calculator – Monthly Payment, PITI & Amortization

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Home Price

Down Payment

Loan Term

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Interest Rate

Taxes & Insurance

Property Tax / Year

1.25%

Home Insurance / Year

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Annual Cost Growth

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Projected yearly increase for taxes and fees

Tax % Inc.

Ins. % Inc.

HOA % Inc.

Maint %

Extra Payments

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Simulate additional principal contributions

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Monthly Extra

One-Time Lump Sum

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Amortization Schedule

Date	Payment	Principal	Interest	Total Interest	Balance
Sep 2024	$2,145	$1,158.09	$2,584	$8,233	$3,893.00
Oct 2024	$2,145	$1,172.08	$1,508	$8,778	$2,325.98
Nov 2024	$2,145	$1,198.33	$1,536	$5,068	$2,932.08

Payment Breakdown

LIVE ESTIMATE

Monthly $7,488

Principal & Interest

$7,145.00

Taxes

$1,562.50

Insurance

$350.00

Total Interest

$582,450

Total Cost of Loan

$2,082,450

trending_up Savings Projection

Interest Saved

$82,450

Time Saved

4y 3m

Based on your inputs, a $100k injection in Jan 2021 yields maximal efficiency.

Equity Curve

Principal

Interest

Principal Paid

$12,145

home

Equity Gained

$342k

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How to Use This Mortgage Calculator

Enter your home price and down payment to set the loan amount, then choose your loan term (10, 15, 20, or 30 years) and your annual interest rate. Click Calculate Mortgage Payment and you'll instantly see your monthly principal & interest payment, a full PITI breakdown, and an amortization schedule showing exactly how each payment splits between principal and interest over the life of the loan.

For the most accurate estimate, also fill in your annual property tax (check your county assessor's website), homeowners insurance (typically $800–$1,500/year), and PMI rate if your down payment is below 20%. PMI usually ranges from 0.5% to 1.5% of the loan amount per year and disappears once you reach 20% equity.

How Monthly Mortgage Payments Are Calculated

The standard fixed-rate mortgage payment formula is:

Monthly P&I Payment M = P × [ r(1+r)ⁿ ] ÷ [ (1+r)ⁿ − 1 ]

P = Loan principal (home price − down payment) r = Monthly interest rate (annual rate ÷ 12) n = Total payments (years × 12)

On a $350,000 home with a 20% down payment ($70,000), at a 7% interest rate on a 30-year term, your loan amount is $280,000 and your monthly P&I payment works out to $1,863. Over 30 years you'd pay $390,680 in interest alone — more than the original loan. That's why even small rate reductions or a shorter term can save you tens of thousands of dollars.

What Goes Into a Full PITI Mortgage Payment?

Lenders qualify you based on your total PITI payment — not just principal and interest. Here's what each component means:

Principal (P) — The portion that reduces your outstanding loan balance.
Interest (I) — The lender's cost of lending you money. In early years, most of your payment goes here.
Taxes (T) — Property taxes collected monthly into an escrow account and paid to your local government annually.
Insurance (I) — Homeowners insurance (required by all lenders) plus PMI if your down payment was under 20%.

15-Year vs 30-Year Mortgage: Which Saves More?

A 30-year mortgage keeps your monthly payment lower, making homeownership more accessible. But you'll pay roughly double the interest over the loan's life compared to a 15-year term. A 15-year mortgage forces faster equity building and typically comes with a slightly lower interest rate from lenders — but your monthly payment will be 25–40% higher. Use the loan term selector above to compare both scenarios side by side before you decide.

How Much Should You Put Down?

A 20% down payment is the classic benchmark: it eliminates PMI, signals creditworthiness to lenders, and immediately gives you substantial equity. However, first-time buyers can access conventional loans with as little as 3% down, and FHA loans require just 3.5%. Weigh the savings from avoiding PMI against the opportunity cost of tying up more cash. Our interest calculator can help you model how a larger down payment affects your long-term interest costs.

Strategies to Lower Your Mortgage Payment

Increase your down payment — Every extra dollar reduces principal and eliminates PMI sooner.
Improve your credit score — Even a 0.5% rate reduction on a $300,000 loan saves ~$30,000 over 30 years.
Choose a longer term — 30 years vs 15 years lowers the monthly payment, though total interest rises.
Buy points — Paying 1% of the loan upfront ("buying a point") typically reduces your rate by 0.25%.
Make extra principal payments — Even $100/month extra can cut years off your loan and save thousands.

Ready to see how your investments grow alongside your home equity? Try our investment calculator or plan your long-term financial picture with our retirement calculator.

Frequently Asked Questions

Common questions about mortgage payments, home loans, and how to get the most from this calculator.

How is a monthly mortgage payment calculated?

Your monthly payment is calculated using the standard amortization formula: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1], where P is your loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (years × 12).

This formula gives you the principal & interest (P&I) portion. Your full PITI payment also includes monthly property tax, homeowners insurance, and — if your down payment was below 20% — Private Mortgage Insurance (PMI).

What is a good down payment percentage for a house?

20% is the traditional benchmark because it eliminates PMI, which typically costs 0.5%–1.5% of the loan per year. On a $350,000 home, that's $1,750–$5,250 in extra annual cost until you hit 20% equity.

That said, many buyers successfully put down less. Conventional loans allow as little as 3%, and FHA loans require 3.5%. VA and USDA loans may require 0% for eligible buyers. A smaller down payment preserves cash for reserves, renovations, or investments — so the "right" amount depends on your full financial picture.

Is a 15-year or 30-year mortgage better?

It depends on your priorities. A 30-year mortgage offers a lower monthly payment, giving you more cash flow flexibility. A 15-year mortgage means a higher payment (typically 25–40% more per month) but you pay roughly 50–60% less in total interest.

Example: $280,000 at 7% — the 30-year P&I is $1,863/month and total interest is ~$390,000. The 15-year P&I is ~$2,516/month but total interest is only ~$173,000. You'd save over $217,000 by choosing the shorter term. Use the loan term selector above to compare both scenarios for your specific numbers.

What does PITI stand for in a mortgage?

PITI stands for Principal, Interest, Taxes, and Insurance — the four components lenders use to calculate your full monthly housing cost:

Principal — Reduces your loan balance
Interest — The lender's charge for borrowing
Taxes — Property taxes held in escrow
Insurance — Homeowners insurance + PMI (if applicable)

Lenders generally require your PITI to be no more than 28% of your gross monthly income. Enter all four components in this calculator to see your true monthly obligation.

How much house can I afford based on my income?

Two widely-used rules of thumb:

28/36 Rule — Keep housing costs (PITI) under 28% of gross monthly income, and total debt payments under 36%. On a $6,000/month salary, that means a mortgage payment no higher than $1,680.
2.5× Rule — Home price should not exceed 2.5× your annual gross income. Earning $80,000/year? Aim for a home at $200,000 or under.

These are starting points, not hard limits. Plug different home prices into this calculator and compare your PITI against your take-home pay. Our salary calculator can help you convert your annual income to a monthly figure for easier comparison.