Phase 2 · Wealth & Leverage
Mortgage Calculator (PITI)
The quoted payment is never the whole payment. See your real all-in monthly cost — principal, interest, taxes, insurance and PMI — and the interest you'll pay over the life of the loan.
What is included in a monthly mortgage payment (PITI)?
Four things: principal, interest, taxes and insurance — plus PMI while your equity is under 20%. Only the P&I part comes from the loan formula; taxes and insurance scale with the home's value, not the loan, so a bigger down payment shrinks the payment far less than people expect.
- Monthly P&I = L × r(1+r)n ÷ ((1+r)n − 1), where L is the loan, r the monthly rate and n the number of months.
- Worked example (defaults on this page): a $420,000 home with $63,000 down at 6.5% over 30 years gives a $357,000 loan and $2,256.48 of P&I — but PITI is $2,969.98 once $385 of tax, $150 of insurance and $178.50 of PMI are added.
- That 15% down payment triggers PMI at roughly 0.6% of the loan per year. Reaching 20% equity removes it and cuts the payment by $178.50 a month, with no change to the loan itself.
- Over the full 30 years those payments total $455,334 of interest — more than the original loan, which is what the monthly figure alone never shows.
Loan balance over time
Under the hood
The math, fully exposed
Every part of the payment, shown — PMI is estimated at 0.6%/yr of the loan while your down payment is under 20%:
Loan = price − down payment
Monthly P&I = L × r × (1+r)n ÷ ((1+r)n − 1)
Property tax / mo = price × tax rate ÷ 12
PMI / mo = loan × 0.6% ÷ 12 (only while down < 20%)
PITI = P&I + tax + insurance + PMI
- Escrow is real money: taxes and insurance can add several hundred dollars a month on top of principal and interest — the gap between a teaser "payment" and your actual one.
- PMI is avoidable: reach 20% down (or 20% equity later) and the PMI line disappears, instantly lowering your payment.
- Then accelerate: once you know the payment, our mortgage paydown calculator shows how extra principal cuts the lifetime interest above.
Your directives
What to do next, based on your numbers
Adjust the sliders to generate tailored recommendations.
Answers
Frequently asked questions
What is PITI?
PITI is the four parts of a true mortgage payment: Principal, Interest, property Taxes and homeowners Insurance — often with PMI on top. Most quick calculators show only principal and interest, which undersells the real monthly cost by hundreds of dollars. Taxes and insurance are usually collected in an escrow account alongside your payment.
What is PMI and how do I avoid or remove it?
Private Mortgage Insurance protects the lender when your down payment is under 20%, and it's pure cost to you — typically 0.3%–1.2% of the loan per year. You avoid it by putting 20% down, and you can usually request its removal once you reach 20% equity (it auto-cancels at 22%). On a large loan, dropping PMI saves real money every month.
How much of my payment goes to interest?
Early on, almost all of it. A mortgage is front-loaded: in the first years the bulk of each payment is interest, with only a little chipping at principal — which slowly flips over the loan's life. It's why total interest over 30 years can rival or exceed the amount borrowed, and why extra early principal payments are so powerful.
How much house can I afford?
A common guideline is the 28/36 rule: keep your total housing payment (PITI) under ~28% of gross monthly income, and all debt payments under ~36%. Lenders also look at credit, reserves and down payment. Use the all-in PITI here — not just principal and interest — when you check those ratios, or you'll overestimate what you can carry.