Complete Mortgage Calculator (PITI + HOA)
Quick Answer: For a $400,000 home with 20% down ($80,000) at 6.8% interest, your total monthly payment is approximately $3,105: $2,094 principal & interest + $420 property tax + $150 insurance + $100 HOA + $0 PMI. With less than 20% down, add $100-250/month PMI. Your true monthly housing cost includes PITI (Principal, Interest, Taxes, Insurance) plus HOA fees and maintenance (1% of home value annually).
Understanding your true monthly mortgage cost requires looking beyond just the principal and interest payment. Most homebuyers focus on the advertised mortgage payment, but your actual monthly housing expense includes property taxes, homeowners insurance, private mortgage insurance (PMI) if you put down less than 20%, HOA fees, and ongoing maintenance costs. This comprehensive PITI calculator (Principal, Interest, Taxes, Insurance) shows you the complete picture, helping you budget accurately and avoid the common mistake of underestimating your total monthly obligation. Whether you're a first-time homebuyer trying to determine affordability, comparing different loan scenarios, or planning to refinance, this tool provides instant calculations of your total monthly payment, the portion going to principal versus interest, your total interest paid over the loan term, and when you'll reach 20% equity to remove PMI.
Your Monthly Payment
Long-Term Costs
Understanding Your Mortgage Payment (PITI Explained)
What is PITI?
PITI stands for Principal, Interest, Taxes, and Insurance—the four main components of your monthly mortgage payment. Lenders use PITI to determine how much house you can afford and ensure you can handle the complete financial obligation.
P - Principal
The portion of your payment that reduces your loan balance. In early years, only 10-15% of your payment goes to principal. As you pay down the loan, this percentage increases. For a $320,000 loan at 6.8%, your first payment includes only $294 principal (the rest is interest), but by year 15, about $800 goes to principal.
I - Interest
The cost of borrowing money. Interest is calculated monthly based on your remaining balance. In early years, 75-85% of your payment is interest. Over a 30-year loan at 6.8% on $320,000, you'll pay approximately $434,000 in interest—more than the original loan amount. This is why making extra principal payments saves significant money long-term.
T - Taxes
Property taxes, typically 1-2% of home value annually (varies by state/county). In most mortgages, 1/12 of your annual property tax is added to your monthly payment and held in an escrow account. Your lender pays the tax bill directly when due. Property taxes usually increase 2-5% annually, so your monthly payment will adjust accordingly.
I - Insurance
Homeowners insurance protects against fire, theft, and damage. Cost depends on home value, location, and coverage level. Like property taxes, insurance is typically escrowed—1/12 of the annual premium is collected monthly. Expect $1,200-$2,400 annually for most homes, though high-risk areas (hurricanes, wildfires) can be $3,000-$6,000+.
Additional Costs Beyond PITI
PMI (Private Mortgage Insurance)
Required if your down payment is less than 20%. PMI protects the lender (not you) if you default. Cost is typically 0.5-1.5% of the loan amount annually ($100-250/month on a $320,000 loan). Good news: Once you reach 20% equity through payments and appreciation, you can request PMI removal, instantly saving $100-250/month. Some loans automatically cancel PMI at 22% equity.
HOA Fees (Homeowners Association)
If your home is in an HOA community, expect monthly fees of $50-500 (some luxury communities charge $1,000+). HOA fees cover common area maintenance, amenities (pool, gym), landscaping, and sometimes exterior maintenance and insurance. Important: HOA fees typically increase 3-5% annually and are not optional—failure to pay can result in liens or foreclosure.
Maintenance & Repairs
Budget 1-2% of home value annually ($4,000-$8,000 for a $400,000 home, or $335-670/month). This covers routine maintenance (HVAC service, gutter cleaning, lawn care) and unexpected repairs (water heater, roof, appliances). New homes need less initially but will eventually require major expenses like roof replacement ($8,000-15,000), HVAC replacement ($5,000-10,000), and water heater ($1,000-2,000).
Utilities
Expect $200-400/month for electricity, gas, water, sewer, and trash. Larger homes and extreme climates cost more. Many first-time buyers underestimate utility costs—a 2,500 sq ft home can easily cost $250-350/month in utilities versus $80-120/month for a 900 sq ft apartment.
💡 Real Monthly Cost: For a $400,000 home with 10% down, your true monthly cost is approximately $3,750-4,200: $2,570 PITI + $200 PMI + $150 HOA + $500 maintenance + $350 utilities. Always budget for the complete picture, not just the mortgage payment.
Example: $400,000 Home with Different Down Payments
20% Down ($80,000)
- Loan Amount: $320,000
- P&I (6.8%, 30yr): $2,094/mo
- Property Tax: $420/mo
- Insurance: $150/mo
- PMI: $0/mo ✓
- HOA: $100/mo
- Total: $2,764/mo
- No PMI saves $133/mo
10% Down ($40,000)
- Loan Amount: $360,000
- P&I (6.8%, 30yr): $2,356/mo
- Property Tax: $420/mo
- Insurance: $150/mo
- PMI: $150/mo ⚠️
- HOA: $100/mo
- Total: $3,176/mo
- +$412/mo vs 20% down
3.5% FHA ($14,000)
- Loan Amount: $386,000
- P&I (6.8%, 30yr): $2,526/mo
- Property Tax: $420/mo
- Insurance: $150/mo
- FHA MIP: $270/mo ⚠️⚠️
- HOA: $100/mo
- Total: $3,466/mo
- +$702/mo vs 20% down
- MIP for life of loan!
Key Takeaway:
A 20% down payment saves $150-300/month by avoiding PMI and having a smaller loan. Over 30 years, that's $54,000-$108,000 in savings. If you can't afford 20% down, aim for at least 10% to minimize PMI costs. Avoid 3.5% FHA loans if possible—the lifetime MIP requirement costs an extra $97,200 over 30 years compared to 20% down conventional loans.
Frequently Asked Questions
What is the 28/36 rule for mortgage affordability?
The 28/36 rule is a lending guideline stating your housing expenses (PITI) should not exceed 28% of gross monthly income, and total debt (PITI + car loans + credit cards + student loans) should not exceed 36% of gross income. For example, with $100,000 annual income ($8,333/month), aim for maximum $2,333/month PITI and $3,000/month total debt. Lenders use this to ensure you can afford payments while maintaining quality of life. However, in high-cost areas, some lenders approve up to 43% debt-to-income ratio, though this leaves little financial cushion for emergencies or savings.
How do I remove PMI from my mortgage?
You can remove PMI once you reach 20% equity in your home through a combination of principal payments and home appreciation. Options: 1) Request removal when you hit 20% equity—contact your lender with a new appraisal ($400-600 cost), 2) Wait for automatic cancellation at 22% equity (federal law requires this), 3) Make extra principal payments to reach 20% equity faster, or 4) Refinance if your home has appreciated significantly. PMI removal instantly saves $100-250/month. On a $320,000 loan at 6.8%, you'll naturally reach 20% equity in approximately 8-9 years without home appreciation or extra payments.
Should I get a 15-year or 30-year mortgage?
30-year mortgages offer lower monthly payments ($2,094/month on $320,000 at 6.8%) but cost significantly more in total interest ($434,000). 15-year mortgages have higher payments ($2,833/month at 6.0%) but save $320,000 in interest and build equity twice as fast. Choose 30-year if: you need lower payments for affordability, want flexibility to invest extra cash elsewhere, or may not stay long-term. Choose 15-year if: you can afford higher payments, want to be debt-free sooner, and don't need cash flexibility. Consider a 30-year mortgage with extra principal payments for the best of both worlds—flexibility with the option to pay off faster.
What's included in closing costs?
Closing costs typically total 2-5% of the home price ($8,000-$20,000 on a $400,000 home). Includes: 1) Loan origination fee (0.5-1% of loan), 2) Appraisal ($500-700), 3) Home inspection ($400-600), 4) Title insurance and search ($1,000-3,000), 5) Attorney/escrow fees ($500-1,500), 6) Recording fees and transfer taxes ($200-2,000), 7) Prepaid property taxes and insurance (2-12 months), and 8) Lender required reserves (2-6 months). You can sometimes negotiate for the seller to cover part of closing costs or roll them into your loan (though this increases your principal and interest payments).
How much do property taxes increase over time?
Property taxes typically increase 2-5% annually, though this varies widely by location. Some states cap increases at 2-3% annually (like California's Prop 13), while others reassess at market value regularly, causing jumps of 10-20%+ in hot markets. Over 30 years, a $420/month tax bill growing at 3% annually becomes $1,020/month—a $600 increase. Always budget for tax increases in your long-term financial planning. Check your local assessment calendar and consider appealing valuations if your home's assessed value seems inflated compared to recent comparable sales in your neighborhood.
Is mortgage interest still tax deductible?
Yes, but with limits. You can deduct mortgage interest on loans up to $750,000 ($375,000 if married filing separately) for homes purchased after December 15, 2017. For older mortgages, the limit is $1 million. However, you must itemize deductions to benefit, and the $29,200 standard deduction (2025, married filing jointly) is higher than what most middle-income households can itemize. The mortgage interest deduction primarily benefits high-income earners with expensive homes and large mortgages. Use our rent vs buy calculator to see if you'll benefit from itemizing or if the standard deduction makes more sense.
What credit score do I need to get approved?
Minimum credit scores vary by loan type: FHA loans accept 580+ (3.5% down) or 500-579 (10% down), conventional loans typically require 620+, and VA/USDA loans prefer 620+. However, higher scores get better rates: 760+ gets the best rate, 700-759 is 0.25% higher, 680-699 is 0.5% higher, and 620-679 is 1%+ higher. On a $320,000 loan, the difference between 6.3% (excellent credit) and 7.3% (fair credit) is $190/month or $68,400 over 30 years. Improve your score before applying by paying down credit cards, disputing errors, and avoiding new credit inquiries for 6 months before applying.
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