Calculate your exact monthly mortgage payment including principal, interest, property taxes, homeowner's insurance, and PMI. Get a complete amortization schedule instantly. Free, no signup.
Your monthly mortgage payment has two core components: principal (the amount you borrowed) and interest (the cost of borrowing). Together these are calculated using the standard amortization formula:
On top of principal and interest, most homeowners also pay property taxes and homeowner's insurance through escrow — collected monthly alongside your mortgage payment. If your down payment is less than 20%, you'll also owe PMI (Private Mortgage Insurance).
Amortization is the process of paying off your loan through regular scheduled payments. In the early years of a mortgage, the vast majority of each payment goes toward interest. As the loan matures, more of each payment is applied to principal.
On a 30-year $280,000 mortgage at 7%, your first payment of ~$1,863 breaks down as: ~$1,633 interest and only ~$230 toward principal. By payment #300 (month 25 of year 25), you're paying ~$1,100 in principal and only ~$763 in interest.
Adding even $100–$200 to your principal each month can cut years off a 30-year mortgage and save tens of thousands in interest. Our table shows the exact remaining balance after every payment.
This is one of the most common mortgage questions. Here's the real comparison on a $280,000 loan:
The 15-year mortgage saves over $231,000 in interest but requires $578 more per month. If you can afford the higher payment, the 15-year is almost always better financially. If cash flow is tight, the 30-year gives flexibility — and you can always make extra principal payments voluntarily.
Private Mortgage Insurance (PMI) is required by lenders when your down payment is below 20% of the home's purchase price. It protects the lender (not you) in case of default. PMI typically costs 0.5–1.5% of the loan amount annually, added to your monthly payment.
On a $280,000 loan, PMI at 1% = $233/month — an extra $2,800/year just for borrowing protection you don't directly benefit from.
You can request PMI removal when your loan balance drops to 80% of the original home value (under the Homeowners Protection Act). Your lender must automatically terminate it at 78%. You can also get the home reappraised if values have risen significantly.
Many buyers forget to track when they reach 20% equity and continue paying PMI unnecessarily for years. Mark a calendar reminder and request removal the moment you hit 80% LTV.
Your credit score is the biggest factor in the rate you're offered. A score above 760 gets you the best rates. Going from 680 to 760 can reduce your rate by 0.5–1%, saving thousands over the life of the loan.
A larger down payment reduces lender risk. Putting down 20%+ eliminates PMI and often qualifies you for better rates. Even moving from 5% to 10% down can lower your rate.
Studies show that getting 5 mortgage quotes instead of just 1 saves borrowers an average of $3,000 over the life of the loan. Always compare at least 3–4 lenders including credit unions and online lenders.
Mortgage points (also called discount points) let you pay upfront to reduce your interest rate. One point = 1% of the loan amount, typically lowering your rate by 0.25%. Calculate your break-even period to see if it makes sense for your situation.