Simple Mortgage Payment
Fast mortgage payment estimate.
About the Simple Mortgage Payment
A stripped-back mortgage estimate: loan, rate, term, payment. Use this when you want a number in ten seconds rather than a full breakdown.
How to use it
- Enter the amount you are borrowing.
- Enter the annual interest rate.
- Enter the term in years.
The formula
This gives you principal and interest — the part of a mortgage payment that repays the bank. It is the fastest honest estimate available, and it is deliberately not the whole bill.
M = P × r(1 + r)n ÷ [(1 + r)n − 1]
The payment that actually leaves your account each month is usually called PITI:
PITI = Principal + Interest + Taxes ÷ 12 + Insurance ÷ 12 (+ PMI)
Property tax runs roughly 0.5% to 2.5% of the home's value a year depending on where you live, and homeowners insurance commonly $1,200 to $2,500 a year. Together they add something like $400 to $700 a month on a mid-priced house — enough to be the difference between comfortable and stretched.
Worked examples
| Loan | Rate | Term | P&I | Est. tax + ins. | Realistic total |
|---|---|---|---|---|---|
| $250,000 | 6.0% | 30 years | $1,498.88 | $420 | $1,919 |
| $300,000 | 6.5% | 30 years | $1,896.20 | $500 | $2,396 |
| $400,000 | 6.5% | 30 years | $2,528.27 | $620 | $3,148 |
| $400,000 | 6.5% | 15 years | $3,484.43 | $620 | $4,104 |
The gap in the last two columns is the entire point of this page. Someone approved for a $2,528 payment often budgets $2,528 and is then surprised by $3,148. The escrow portion is not optional and it does not shrink as you pay the loan down — if anything it rises with assessments and premiums, which is why a payment that was comfortable in year one can tighten by year five.
Common mistakes
- Budgeting the P&I figure as your housing cost. It omits tax, insurance and any PMI. On a $400,000 loan that is roughly $620 a month missing from the plan — and it omits maintenance entirely, which is not escrowed but is very real.
- Assuming a fixed-rate payment never changes. The principal and interest portion is genuinely fixed. The escrow portion is re-evaluated annually, so your total payment can rise even on a fixed-rate mortgage.
- Forgetting PMI below a 20% deposit. Typically 0.3% to 1.5% of the loan a year — $100 to $500 a month on a $400,000 loan. It usually ends automatically at 22% equity, but you can often request cancellation at 20%.
- Using the sale price as the loan amount. Subtract your deposit first. This is the most common reason a quick estimate comes back several hundred dollars too high.
Terms explained
- P&I
- Principal and interest: the portion that repays the lender. What this calculator returns.
- PITI
- Principal, interest, taxes and insurance — the payment you actually make, and the figure lenders use when assessing what you can afford.
- Escrow
- The account your lender uses to hold and pay tax and insurance. Reviewed each year, so it can go up or down.
- Millage rate
- How property tax is often expressed: dollars of tax per $1,000 of assessed value. A 20-mill rate on a $300,000 assessment is $6,000 a year.
- Assessed value
- The value your local authority taxes you on, which is frequently not the market price and often lags it.
- Homeowners insurance
- Cover against damage and liability, required by every lender. Premiums vary sharply by region, roof age and claim history.
Common questions
- Why does this differ from my lender's quote?
- This is principal and interest only. A lender quotes PITI, which adds tax, insurance and possibly PMI — commonly $400 to $700 a month more.
- What is a realistic tax and insurance estimate?
- As a starting point, budget about 1.2% of the home's value a year for property tax and $1,500 for insurance, then check both locally. Tax rates vary enormously between counties, and insurance has moved a long way in some states.
- Does my payment change over time?
- Principal and interest do not on a fixed-rate loan. Escrow does, whenever your assessment or premium is updated, so most people see their total payment drift upward.
- How do I get rid of PMI?
- Reach 20% equity and ask, or wait for automatic termination at 22%. Equity can come from paying down the balance or from the home appreciating — some lenders accept a fresh appraisal as evidence.
- Is it better to put down more or keep the cash?
- A larger deposit reduces the loan and can remove PMI, both of which save money. But an emergency fund is what keeps you from missing a payment in the first place, and a house you cannot afford to maintain is a slow problem.
- What is the difference between this and the full mortgage calculator?
- This one is built for speed and shows you the escrow gap explicitly. The full calculator focuses on total interest and comparing terms, which is the question you ask once you know the payment fits.
- Do I pay tax and insurance separately if I have no escrow?
- Yes — some lenders waive escrow at low loan-to-value ratios, which means the bills arrive annually or semi-annually and are yours to save for. The total cost is the same; the discipline required is not.
- Does this work for a 15-year loan?
- Yes. Enter 15 as the term. The escrow portion does not change with the term, so the gap between P&I and your real payment stays roughly the same in dollars while shrinking as a percentage.