What is included in a monthly mortgage payment?

Four things, often abbreviated PITI: principal, interest, property taxes, and homeowners insurance. Lenders commonly collect the tax and insurance portions in an escrow account and pay those bills on your behalf. Private mortgage insurance and any HOA dues sit on top of that.

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

A 15-year loan carries a higher monthly payment but dramatically less total interest, because you are borrowing for half as long and usually at a slightly lower rate. A 30-year loan costs far more over its life but leaves more monthly cash free. The tradeoff is between total cost and monthly flexibility, and this calculator lets you price both to compare.

How much does the interest rate change the payment?

Substantially. On a $400,000 loan over 30 years, each additional percentage point of rate adds roughly $250 to the monthly payment and tens of thousands of dollars over the full term. Rate matters more to total cost than most buyers expect, which is why comparing offers from several lenders is worth the effort.

Does this calculator quote current mortgage rates?

No. Alto does not sell or broker loans and does not publish rate quotes. Enter the rate you have actually been offered, or a rate you want to test — the field is there for you to control, and the default is only a starting point.

How much house can I afford?

A common lender guideline is that total housing costs stay under about 28 percent of gross monthly income, and all debt payments under about 36 percent. Work backward from your income to a target payment, then use this calculator to find the price that produces it at your rate and down payment.

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Mortgage Payment Calculator

Principal, interest, property tax, and insurance — the whole payment, not just the part lenders advertise.

The rate, tax, and insurance fields are starting assumptions you should replace with your own figures. Alto does not broker loans and does not quote rates — use the rate a lender has actually offered you, and your county's assessed tax rate.

Try a price:

$250,000 $400,000 $600,000 $900,000

This calculator gives you the number that actually leaves your account each month, not just principal and interest. Property tax and homeowners insurance are folded in, because on a typical loan they add hundreds of dollars a month and are the single most common reason a quoted payment turns out to be wrong.

It also shows total interest over the full term, which is the figure that makes the difference between a 15-year and a 30-year loan obvious in a way the monthly payment never does.

How the payment is calculated

Principal and interest come from the standard amortization formula: the loan amount multiplied by the monthly rate, divided by one minus the compounded discount factor over the number of payments. In plain terms, it solves for the fixed monthly amount that pays the loan to exactly zero at the end of the term. Property tax and insurance are then added as monthly twelfths of their annual cost, which is how a lender's escrow account handles them.

Why early payments are almost all interest

Interest is charged on the outstanding balance, which is at its largest on day one. On a 30-year loan at typical rates, the first payment is roughly two-thirds interest and one-third principal, and the crossover point where principal finally exceeds interest does not arrive until well past the halfway mark. This is why paying even a small amount extra in the early years removes a disproportionate amount of total interest: every extra dollar of principal is a dollar that stops accruing interest for the remaining decades.

What this estimate leaves out

Private mortgage insurance is usually required when the down payment is under 20 percent and typically runs a few tenths of a percent of the loan each year until enough equity builds up. Homeowners association dues, closing costs, and any lender fees rolled into the rate are also excluded. Adjustable-rate loans are not modeled here at all, since their payment changes at each reset. Treat the result as a planning figure and a lender's Loan Estimate as the binding one.

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Mortgage Payment Calculator — Frequently Asked Questions

What is included in a monthly mortgage payment?: Four things, often abbreviated PITI: principal, interest, property taxes, and homeowners insurance. Lenders commonly collect the tax and insurance portions in an escrow account and pay those bills on your behalf. Private mortgage insurance and any HOA dues sit on top of that.
Is a 15-year or 30-year mortgage better?: A 15-year loan carries a higher monthly payment but dramatically less total interest, because you are borrowing for half as long and usually at a slightly lower rate. A 30-year loan costs far more over its life but leaves more monthly cash free. The tradeoff is between total cost and monthly flexibility, and this calculator lets you price both to compare.
How much does the interest rate change the payment?: Substantially. On a $400,000 loan over 30 years, each additional percentage point of rate adds roughly $250 to the monthly payment and tens of thousands of dollars over the full term. Rate matters more to total cost than most buyers expect, which is why comparing offers from several lenders is worth the effort.
Does this calculator quote current mortgage rates?: No. Alto does not sell or broker loans and does not publish rate quotes. Enter the rate you have actually been offered, or a rate you want to test — the field is there for you to control, and the default is only a starting point.
How much house can I afford?: A common lender guideline is that total housing costs stay under about 28 percent of gross monthly income, and all debt payments under about 36 percent. Work backward from your income to a target payment, then use this calculator to find the price that produces it at your rate and down payment.

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