📊 What's Included in Your Monthly Payment?
Your monthly mortgage payment is more than just principal and interest. Here's the complete breakdown:
P - Principal
~30-40%The portion that pays down your loan balance. Starts small and grows over time as you pay down interest.
I - Interest
~30-40%The cost of borrowing money. Starts high and decreases over time. This is where your rate matters most!
T - Property Taxes
~15-20%Varies by location (0.3% to 2.5% of home value annually). Collected monthly and held in escrow.
I - Insurance
~5-10%Homeowner's insurance protects your home. Required by lenders. Typically $1,000-$3,000/year.
PMI - Private Mortgage Insurance
~5-10%Required if down payment is less than 20%. Typically 0.5-1% of loan amount annually. Drops off once you reach 20% equity.
💡 PITI = Your True Monthly Cost
When budgeting, always use PITI (Principal + Interest + Taxes + Insurance), not just P&I. The difference can be $500-$1,000+ per month!
📐 The Mortgage Payment Formula
Monthly P&I Payment Formula
M = P × [r(1+r)^n] / [(1+r)^n - 1]
Where:
- • M = Monthly payment
- • P = Principal (loan amount)
- • r = Monthly interest rate (annual ÷ 12)
- • n = Number of payments (years × 12)
Example ($400K loan, 6%, 30 years):
- • P = $400,000
- • r = 0.06 ÷ 12 = 0.005
- • n = 30 × 12 = 360
- • M = $2,398/month
🎯 Skip the Math - Get Real Numbers
Why calculate when you can get exact numbers? Pre-approval gives you real rates and payments from actual lenders based on YOUR credit and situation.
Get Pre-Approved Now →📈 How Interest Rate Affects Your Payment
Even a small rate difference has a HUGE impact on your monthly payment and total cost:
| Interest Rate | Monthly P&I* | Total Interest Paid | Total Cost |
|---|---|---|---|
| 5.5% | $2,271 | $417,560 | $817,560 |
| 6.0% | $2,398 | $463,280 | $863,280 |
| 6.5% | $2,528 | $510,080 | $910,080 |
| 7.0% | $2,661 | $557,960 | $957,960 |
| 7.5% | $2,797 | $606,920 | $1,006,920 |
*Based on $400,000 loan, 30-year fixed
💰 The Difference is MASSIVE!
A 2% rate difference (5.5% vs 7.5%) means $526/month more and $189,360 more in total interest over 30 years! This is why shopping for the best rate is so important.Compare rates now
⏱️ 15-Year vs 30-Year Mortgage
| Feature | 15-Year | 30-Year |
|---|---|---|
| Monthly Payment* | $3,375 | $2,398 |
| Interest Rate | ~5.5% | ~6.0% |
| Total Interest Paid | $207,500 | $463,280 |
| Total Cost | $607,500 | $863,280 |
| Best For | Higher income, want to save on interest | Lower monthly payment, more flexibility |
*Based on $400,000 loan
💡 5 Ways to Lower Your Monthly Payment
1. Improve Your Credit Score
Higher credit = lower rate = lower payment. Even 20 points can save you 0.125-0.25% on your rate.See credit tips
2. Make a Larger Down Payment
More down = smaller loan = lower payment. Plus, 20% down eliminates PMI ($100-$300/month savings).
3. Shop Multiple Lenders
Rates vary by 0.5%+ between lenders. Always compare at least 3-5 lenders.Compare lenders now
4. Buy Discount Points
Pay 1% of loan upfront to reduce rate by 0.25%. Makes sense if you'll stay 5+ years.
5. Choose a Longer Term
30-year has lower payments than 15-year (but more total interest). Choose based on your goals.
❓ Mortgage Calculator FAQ
What is a good mortgage payment?
A good mortgage payment is one that's ≤28% of your gross monthly income. This leaves room for other expenses, savings, and emergencies.
How much is a $400,000 mortgage payment?
At 6% interest with 10% down ($360K loan), the P&I payment is ~$2,158/month. Add taxes, insurance, and PMI for a total of ~$2,800-$3,000/month.
Does the calculator include taxes and insurance?
Basic calculators show P&I only. Always add 20-30% for taxes, insurance, and PMI to get your true monthly cost.
What mortgage rate should I use for 2026?
Experts predict 30-year rates of 5.5-6% by late 2026. Use 6% for conservative planning.See 2026 rate forecast
🏠 Ready to Get Your Real Numbers?
Calculators give estimates. Pre-approval gives you REAL numbers based on YOUR credit, income, and the actual rates you qualify for. Get pre-approved in minutes!