Own Your Dream Home: The Ultimate Mortgage Estimator
Buying a house is likely the biggest purchase of your life, but the sticker price is just the tip of the iceberg. A $400,000 home doesn't cost $400,000; once you add interest, taxes, and insurance, the real cost is often double that. Our Advanced Mortgage Calculator cuts through the confusion. It calculates your true monthly payment (PITI) and provides a detailed Amortization Schedule to show exactly where every dollar goes over the next 30 years.
Breaking Down PITI: What is in Your Payment?
Your monthly check to the bank covers four main buckets, known as PITI. This calculator lets you input all of them for 100% accuracy:
- Principal: The money that actually pays down your debt. In the beginning, this is a tiny portion of your payment.
- Interest: The profit the bank makes. On a 30-year loan, you might pay more in interest than the house is worth!
- Taxes: Property taxes are collected by the lender and held in escrow. They typically range from 1% to 2.5% of the home's value annually.
- Insurance: Homeowners insurance protects against fire and theft. Lenders mandate this.
The Power of Extra Payments
The secret banks don't want you to know is the power of Prepayment. Because interest is calculated on your current balance, paying down the principal faster saves you exponential amounts of money.
Example:
On a $300,000 loan at 6% interest for 30 years:
Standard Payment: You pay $347,000 in total interest.
+$100 Extra/Month: You pay only $296,000 in interest and finish the loan 4 years early.
Use the "Monthly Extra" field in our calculator to see how much a small sacrifice today saves you tomorrow.
What is PMI?
If your Down Payment is less than 20%, lenders usually require Private Mortgage Insurance (PMI). This protects the bank (not you) if you default. It typically costs 0.5% - 1% of the loan amount per year. Our tool automatically calculates this cost until you reach 20% equity, at which point PMI usually drops off.
Frequently Asked Questions
Should I choose a 15-year or 30-year mortgage?
A 30-year loan has lower monthly payments, making it more affordable month-to-month. A 15-year loan has higher payments but significantly lower interest rates and total cost. If you can afford the higher payment, the 15-year option builds wealth much faster.
Do property taxes affect my loan approval?
Yes. Lenders look at your "Debt-to-Income Ratio" (DTI). High property taxes increase your monthly obligation, which might reduce the maximum loan amount you qualify for.
What are Closing Costs?
These are fees paid at the signing of the mortgage (appraisal, title insurance, origination fees). They typically run 2% to 5% of the loan amount. While this calculator focuses on monthly payments, you should have cash set aside for these upfront costs.