The Importance of Knowing Your Mortgage Payment
Buying a house is likely the biggest financial decision you will ever make. Understanding exactly how much you will pay each month is crucial for budgeting and long-term financial health.
The Formula
The manual formula to calculate your monthly mortgage payment is: M = P [ r(1 + r)^n ] / [ (1 + r)^n - 1 ]
- M: Total monthly payment
- P: Principal loan amount
- r: Your monthly interest rate (annual rate divided by 12)
- n: Total number of payments (months)
While calculating this manually can be tedious, our free Mortgage Calculator does the math for you instantly.
What is PITI?
PITI stands for Principal, Interest, Taxes, and Insurance. While the formula above calculates the principal and interest, your actual monthly housing cost will also include property taxes, home insurance, and potentially Private Mortgage Insurance (PMI) or HOA fees.