Free Mortgage Calculator — Monthly Payment, PITI & Amortization

PITI stands for Principal, Interest, Taxes, and Insurance — the four components of a full monthly mortgage payment. Principal and interest repay the loan itself. Property taxes are collected monthly and held in escrow by your lender, then paid to local government annually. Homeowners insurance is also escrowed and paid annually. Knowing your full PITI payment — not just principal and interest — is critical for accurate budgeting, as taxes and insurance can add $300–$1,000+ per month to your payment.

PMI (Private Mortgage Insurance) is required by most lenders when your down payment is less than 20% of the purchase price. It protects the lender — not you — in case of default. PMI typically costs 0.5%–1.5% of the loan amount per year, adding $100–$400/month to your payment. You can request removal once your loan-to-value ratio reaches 80% (either through payments or appreciation). Under federal law (Homeowners Protection Act), lenders must automatically cancel PMI when your balance reaches 78% of the original purchase price.

A common rule is that your total housing payment (PITI) should not exceed 28% of your gross monthly income, and total debt payments should not exceed 36% (the 28/36 rule). For example, with a $8,000/month gross income, maximum PITI would be $2,240. Use our affordability calculator — enter your income and we calculate the maximum home price you can afford. Lenders also consider credit score, debt-to-income ratio and employment history.

A larger down payment reduces your loan amount, lowers monthly payments, and eliminates PMI once you reach 20%. It also reduces total interest paid over the life of the loan. However, a larger down payment means less cash on hand for emergencies and home repairs. Many financial advisors suggest 20% to avoid PMI, but FHA loans (3.5% down) and conventional loans (3% down) are available. Use our calculator to compare different down payment scenarios.

The rent vs buy comparison considers your monthly mortgage payment, expected home price appreciation, equity built through principal payments, and the opportunity cost of your down payment. Buying generally makes more financial sense if you plan to stay 5+ years, as appreciation and equity accumulation offset the higher initial costs. Renting is better for flexibility or in overpriced markets. Our calculator provides a rough financial comparison — personal factors like lifestyle, stability and career plans matter equally.