What goes into a real mortgage payment

Mortgage shoppers often see a low "monthly payment" number on a listing and assume it covers everything. It doesn't. A real monthly payment in the US is PITI: Principal, Interest, Taxes, Insurance. Some buyers also have PMI (private mortgage insurance) and HOA fees on top. This calculator shows the real number.

The PITI components

• Principal (P): The portion of each payment that reduces the loan balance. Starts small (most of an early payment is interest) and grows over time.
• Interest (I): What the bank charges for the loan. Calculated on the remaining balance, so it shrinks as you pay down.
• Taxes (T): Property tax, prorated monthly. Average across the US is ~1.1% of home value annually, but ranges from 0.3% (Hawaii) to 2.5%+ (New Jersey, Illinois).
• Insurance (I): Homeowners insurance (HOI), required by every lender. Typically $80–$200/month depending on home value and location.

Plus the often-forgotten parts

• PMI (private mortgage insurance): Required when you put down less than 20%. Adds 0.3–1.5% of the loan amount annually. Falls off automatically when you reach 22% equity, or you can request removal at 20%.
• HOA fees: Condos and planned communities. Can range from $50 to $1000+/month — get the actual figure from the seller before you make an offer.
• Closing costs: 2–5% of the home price, paid once at closing. Not in the monthly but they affect what house you can actually buy.

What this calculator does

• Computes the true PITI with PMI and (optionally) HOA — not just "principal + interest."
• Generates a full amortization table showing the principal/interest split for every month and the balance over time.
• 15-year vs 30-year comparison so you can see exactly what the shorter term saves you in interest (often $100,000+ on a typical home).
• Extra-payment what-ifs: add $200/month to principal, see the payoff date pulled in by 4–7 years and tens of thousands of dollars in interest saved.
• PMI auto-drop logic: the amortization table shows PMI ending the month you cross 22% equity.
• All math happens in your browser. Inputs aren't saved to any server.

Common decisions this helps with

• Affordability check. A bank will pre-approve you for "X dollars"; the calculator shows the actual monthly burden including escrow, which is usually 20–30% higher than the advertised principal-and-interest figure.
• 15 vs 30. A 15-year mortgage has a higher monthly payment but builds equity twice as fast and saves enormous interest. The trade-off is liquidity.
• Pay extra or invest the difference? The mortgage rate is your guaranteed savings if you pay down debt; compare to an expected-return calculation on the investment alternative.
• PMI vs putting down 20%. If you can put down 20%, the calculator shows the monthly savings. If you can't, PMI is annoying but eventually drops off — not a permanent tax.