Lenders advertise principal and interest — but your real monthly housing cost is PITI: Principal + Interest + Taxes + Insurance. Add PMI if your down payment is under 20% and you could be paying $200–$500 more per month than the advertised payment. Our calculator shows you the full truth upfront.
Your real payment: Principal + Interest + Taxes + Insurance — not just P&I
Added when down payment < 20% — typically $80–$250/month on $200K loan
Max housing cost as % of gross income recommended by mortgage lenders
15-year mortgage saves $100K–$200K+ in interest vs 30-year
| Loan Amount | Rate | 30-Year P&I | 15-Year P&I | Total Interest Saved |
|---|---|---|---|---|
| $200,000 | 7% | $1,331/mo | $1,798/mo | ~$93,000 |
| $300,000 | 7% | $1,996/mo | $2,697/mo | ~$139,000 |
| $400,000 | 7.5% | $2,797/mo | $3,702/mo | ~$195,000 |
| $500,000 | 7.5% | $3,496/mo | $4,628/mo | ~$243,000 |
The portion reducing your loan balance. In the early years of a 30-year mortgage, only 15%–25% of each payment is principal. By year 25, most of your payment goes to principal. This gradual shift is amortization — the calculator above shows you exactly how it works month by month.
On a $300,000 mortgage at 7.5% for 30 years, total interest paid exceeds $455,000 — more than 1.5x the loan amount. This is why rate matters so much, and why even a 0.5% rate difference over 30 years can mean $30,000+ in savings.
Property tax rates range from under 0.3% (some Hawaii counties) to over 2.5% (parts of New Jersey and Illinois) of assessed home value annually. Your lender collects 1/12 of your annual tax bill each month and pays the taxing authority directly from an escrow account.
PMI protects the lender — not you — and costs 0.5%–1.5% of the loan annually. On a $280,000 loan, that's $117–$350/month. You can request PMI cancellation when your loan balance reaches 80% of the original purchase price. Lenders must auto-cancel at 78% per federal law (Homeowners Protection Act).
Each 20-point score tier above 680 typically unlocks a lower rate tier. On a $300,000 loan, a 0.5% rate improvement saves $90/month and $32,000+ over 30 years.
Total monthly debts including your new mortgage payment should stay below 43% of gross monthly income for conventional approval. FHA allows higher with compensating factors.
20% down removes PMI ($100–$350/month), often gets a better interest rate, and significantly reduces your monthly payment on all fronts.
Multiple mortgage applications within a 45-day window count as one credit inquiry for FICO scoring. Comparing 5 lenders can find rate differences of 0.25%–0.75% — worth tens of thousands over 30 years.
PITI stands for Principal, Interest, Taxes, and Insurance — the four components of a complete monthly mortgage payment. Lenders often advertise only the P&I portion, but your real monthly cost includes property taxes, homeowners insurance, PMI (if down payment is under 20%), and any HOA fees.
PMI (Private Mortgage Insurance) protects the lender when you put less than 20% down. It typically costs 0.5%–1.5% of the loan amount annually ($80–$250/month on a $200K loan). You can request PMI cancellation when your loan balance reaches 80% of the original home value. Federal law requires automatic cancellation at 78%.
Most lenders require your PITI payment to stay below 28%–31% of gross monthly income, and total monthly debts below 43%. On $5,000/month gross income: max PITI ≈ $1,400–$1,550. Use the calculator above — enter your budget as the target and find what purchase price fits.
On a $300,000 loan at 7%: 30-year costs $1,996/month (P&I) and $418,000 in total interest; 15-year costs $2,697/month but only $185,000 in interest — a $233,000 difference. Choose 15-year if the higher payment is comfortably sustainable in your budget.
Key factors: credit score (740+ gets best rates), down payment (20%+ eliminates PMI and often gets better rate), debt-to-income ratio, and shopping multiple lenders. Rate shopping within 45 days counts as one inquiry — compare at least 3–5 lenders before deciding.
Our complete guide covers FHA, USDA, VA, and down payment assistance programs for every credit situation.
Home Buying with Bad Credit →Full amortization with prepayment analysis
Complete bad credit home buyer guide
Score requirements by loan type
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USDA, VA, and assistance programs
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⚠ Disclaimer: Calculator estimates only. Property taxes, insurance costs, and PMI rates vary significantly by location and lender. Not financial or legal advice. Consult a licensed mortgage professional. See our Disclaimer and Privacy Policy.