How to Calculate Your Mortgage Payment
Shopping for a mortgage or refinancing in 2026 comes with one big practical question: What will my monthly payment be, and does it actually fit my budget?
Rates, terms, taxes, insurance, and the loan type all influence your payment. Understanding how these pieces fit together helps you shop smarter, plan better, and avoid surprises.
Below is a clear breakdown of everything that goes into a mortgage payment and how to calculate it — manually or with the help of modern calculators.
What Is a Mortgage Payment?
A mortgage payment is the amount you pay your lender every month to repay your home loan. Today’s standard mortgage payment usually includes four components — often called PITI — plus mortgage insurance when applicable:
Principal
This is the amount you borrowed and are paying back. If your loan is $300,000 and you’ve paid off $75,000, your remaining principal is $225,000.
Interest
This is the cost of borrowing money. Your monthly interest is based on your interest rate, which is influenced by credit score, loan program, and market conditions.
Taxes
Property taxes are collected monthly in an escrow account and paid out by your lender when due. Taxes fund local services like schools, roads, and emergency services.
Homeowners insurance
Lenders require coverage against damage or loss. This payment is also usually escrowed and included in your monthly mortgage bill.
Mortgage insurance (when required)
If your down payment is under 20% on a conventional loan, you pay private mortgage insurance (PMI).
FHA loans include mortgage insurance premiums (MIP), typically for the life of the loan.
How Do I Calculate My Mortgage Payment?
Your monthly mortgage payment depends on:
• The principal amount
• Your interest rate
• The length of your loan term (number of monthly payments)
For a fixed-rate mortgage, the calculation is based on your original loan amount and your base interest rate — not your APR.
To find your total number of payments:
• A 30-year mortgage = 360 payments
• A 15-year mortgage = 180 payments
Formula for Calculating Mortgage Payments
The traditional formula is:
M = P[r(1 + r)^n] / [(1 + r)^n – 1]
Where:
M = Monthly mortgage payment
P = Loan principal
r = Monthly interest rate (annual rate ÷ 12)
n = Number of payments (years × 12)
It’s powerful, but not exactly fun to compute by hand. Most people use digital mortgage calculators — they’re fast, accurate, and remove all the algebra headaches.
Types of Mortgage Calculators
In 2026, online calculators are more accurate and user-friendly than ever, often pulling real-time tax and insurance data. Here are the common ones:
Purchase Calculator
Helps you estimate how much home you can afford based on income, debts, credit, down payment, taxes, insurance, HOA fees, and debt-to-income ratio (DTI).
As a rule of thumb, many lenders prefer a DTI of 43% or lower for a qualifying mortgage.
Refinance Calculator
Shows your potential new payment, new rate, closing costs, and estimated savings. It typically asks for:
• Your home’s estimated value
• Current loan balance and payment
• New loan amount
• ZIP code (to estimate local closing costs)
• Preferred loan term
Amortization Calculator
Breaks down each monthly payment into principal and interest so you can see how your loan balance drops over time.
An amortization schedule helps you visualize long-term repayment, interest costs, and equity growth.
What Can a Mortgage Calculator Help With?
A good calculator can help you decide:
Your ideal loan term
Compare monthly payments and total interest for 15-year vs. 30-year loans.
Whether a home fits your budget
If the numbers strain your monthly cash flow, it’s a sign to look for a lower-priced home.
How much to put down
See how different down payment amounts change monthly payments, PMI costs, and your overall loan profile.
Whether buying makes more sense than renting
Tools can show how your payment compares to rent, how fast you build equity, and your long-term financial impact.
In 2026, more buyers and homeowners are using calculators before ever speaking with a lender. It’s a simple way to get clarity, avoid miscalculations, and plan confidently — whether you’re buying your first home, refinancing to a better rate, or preparing for a long-term financial move.
