Estimated Monthly Payment
$2,572.62
Principal & Interest
$2,022.62
Property Tax
$400.00
Insurance
$150.00
$320,000.00
$80,000.00
$408,142.36
$808,142.36
| Loan Term | Monthly P&I | Total Interest | Total Cost |
|---|---|---|---|
| 30 years | $2,022.62 | $408,142.36 | $808,142.36 |
| 20 years | $2,385.83 | $252,600.17 | $652,600.17 |
| 15 years | $2,787.54 | $181,757.84 | $581,757.84 |
| 10 years | $3,633.54 | $116,024.23 | $516,024.23 |
| Year | Principal | Interest | Remaining Balance |
|---|---|---|---|
| 1 | $3,576.72 | $20,694.69 | $316,423.28 |
| 2 | $3,816.26 | $20,455.15 | $312,607.02 |
| 3 | $4,071.84 | $20,199.57 | $308,535.17 |
| 4 | $4,344.54 | $19,926.87 | $304,190.63 |
| 5 | $4,635.50 | $19,635.91 | $299,555.13 |
| ... | |||
| 10 | $6,410.06 | $17,861.36 | $271,283.60 |
| ... | |||
| 15 | $8,863.94 | $15,407.48 | $232,189.25 |
| ... | |||
| 20 | $12,257.20 | $12,014.21 | $178,128.90 |
| ... | |||
| 25 | $16,949.47 | $7,321.94 | $103,373.32 |
| ... | |||
| 28 | $20,588.05 | $3,683.37 | $45,404.89 |
| 29 | $21,966.86 | $2,304.55 | $23,438.03 |
| 30 | $23,438.03 | $833.39 | $0.00 |
Understanding Your Mortgage Payment
Principal
The portion of your payment that goes toward paying down your loan balance.
Interest
The cost of borrowing money, calculated as a percentage of your remaining balance.
Taxes
Annual property taxes divided by 12, often collected in escrow by your lender.
Insurance
Homeowners insurance and PMI (if applicable) to protect your investment.
Frequently Asked Questions
How is a mortgage payment calculated?
Your mortgage payment is calculated using the loan principal, interest rate, and loan term. The standard formula determines a fixed monthly payment that covers both principal and interest, ensuring the loan is fully paid off by the end of the term.
What is PMI and when do I need it?
Private Mortgage Insurance (PMI) is required when your down payment is less than 20% of the home's value. It protects the lender if you default. PMI typically costs 0.5-1% of the loan amount annually and can be removed once you reach 20% equity.
Should I make a larger down payment?
A larger down payment reduces your loan amount, monthly payment, and total interest paid. With 20% down, you avoid PMI. However, keep enough savings for emergencies and don't sacrifice retirement contributions for a bigger down payment.
How do I get the best mortgage rate?
To get the best rate: maintain a credit score above 740, shop multiple lenders, consider paying points, make a 20% down payment, and choose a shorter loan term. Even a 0.25% rate difference can save thousands over the loan's life.
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