Mortgage Payment Calculator (PITI) — 2026

Principal —

the portion that reduces your loan balance. It is the only part that builds equity, and it starts small and grows every month.

Interest —

the lender's charge for the outstanding balance. Because it is calculated on what you still owe, it dominates early payments and shrinks as the balance falls.

Taxes —

county property tax, collected monthly into escrow and paid out once or twice a year. Reassessments move this up over time, often sharply after a sale resets your assessed value.

Insurance —

homeowners (hazard) insurance, also escrowed. Required by every lender. In high-risk regions this has become the fastest-rising line in the payment.

PMI —

private mortgage insurance, charged when the down payment is under 20%. It protects the lender, not you, and is the one component you can deliberately eliminate.

HOA dues —

not part of PITI and usually not escrowed, but lenders count them against your debt-to-income ratio, so they directly reduce how much house you qualify for.

Amortization front-loads interest. Interest each month is charged on the remaining balance, and at the start the balance is at its maximum — so the interest slice is at its maximum too. On the $320,000 example above, the first payment splits roughly $1,733 to interest and only $289 to principal.

The crossover point — where principal finally exceeds interest in a single payment — arrives surprisingly late. On a 30-year loan at 6.5%, it lands around year 18. This is why selling or refinancing in the first few years builds far less equity than most buyers expect: you have been renting money, not buying the house.

It also explains the outsized power of early extra payments. A dollar of extra principal in year one removes that dollar from every subsequent interest calculation for 29 years. The same dollar applied in year 25 saves almost nothing.

Underwriting is governed by two debt-to-income ratios. The front-end ratio measures housing cost alone against gross monthly income; the back-end ratio measures all recurring debt — housing plus car loans, student loans, credit card minimums and child support.

The classic guideline is the 28/36 rule: housing at or below 28% of gross income, total debt at or below 36%. Modern automated underwriting is more permissive, and qualified mortgages generally allow back-end ratios up to 43%, with some programs stretching to 50% when compensating factors like large reserves or a high credit score are present.

Being approved for a number is not the same as that number being wise. Approval math uses gross income; your life runs on net income after tax, retirement contributions and health premiums. Buyers who borrow to their ceiling are the ones most exposed when a roof, a job change or an insurance repricing arrives.

PMI typically runs between roughly 0.3% and 1.5% of the loan amount per year, driven mainly by your credit score and loan-to-value ratio. On a $320,000 loan, even 0.5% is $1,600 a year — $133 every month buying you nothing.

Under the federal Homeowners Protection Act, a borrower may request PMI cancellation once the balance reaches 80% of the home's original value, and the servicer must terminate it automatically at 78% provided payments are current. These rights apply to loans on a primary residence.

Two caveats catch people out. First, appreciation does not count toward the automatic trigger — that is measured against original value, so a rising market does not remove PMI on its own, though many servicers will consider a request supported by a new appraisal. Second, FHA loans work differently: mortgage insurance premiums on most modern FHA loans last the life of the loan unless you refinance into a conventional mortgage.

A 15-year mortgage carries a lower interest rate and drastically less total interest, but a much higher required payment. On our $320,000 example at 6.5% versus roughly 5.8% for a 15-year, the payment rises from about $2,022 to roughly $2,663 — while lifetime interest falls from about $407,900 to roughly $159,300.

The saving is enormous, but the obligation is rigid. A 30-year loan with voluntary extra principal payments reaches a similar outcome while preserving the option to fall back to the lower required payment in a bad year. Which is better depends less on the arithmetic than on whether you value the guaranteed saving or the flexibility.

One discount point costs 1% of the loan amount and typically lowers the rate by roughly 0.25%, though the exact trade varies by lender and market. On a $320,000 loan, a point costs $3,200 and might cut the payment by about $52 a month.

The evaluation is a simple break-even: cost divided by monthly saving. In that example, $3,200 ÷ $52 ≈ 62 months. If you sell or refinance before roughly five years, buying the point loses money; if you hold the loan for the full term, it saves substantially.

Because the median homeowner moves or refinances well before a 30-year term completes, points reward borrowers who are confident they will stay put. Ask the lender for the break-even in months rather than the rate alone — it is the number that actually decides it.