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Mortgage Calculator With Taxes, Insurance and Extra Payments
Estimate the monthly principal and interest on a fixed-rate home loan, add yearly property tax, insurance and association fees, and see how extra payments shorten the loan and cut interest.
How a fixed-rate mortgage payment is built
The loan amount is the price minus the down payment. The principal-and-interest payment then follows the standard annuity formula:
Payment = L × r ÷ (1 − (1 + r)−n)
where L is the loan amount, r is the annual rate divided by 12 and n is the number of monthly payments. Each month the interest charged is the current balance times r; whatever is left of the payment reduces the balance. The yearly table adds those monthly pieces together so you can see the balance fall.
The headline figure adds the other recurring costs of owning the home: one twelfth of the yearly property tax, one twelfth of the yearly insurance premium and any monthly association fee. Lenders and budgets often describe this combination as principal, interest, taxes and insurance.
What extra payments do
An extra payment goes straight to principal when the lender applies it that way. The next month's interest is then charged on a smaller balance, so more of the regular payment also goes to principal. The effect compounds, which is why the result shows both interest saved and months saved against the same loan with no extras.
Check your loan terms first. Some lenders apply extra money to the next scheduled payment instead of the balance unless you tell them, and a few loans charge a prepayment penalty.
Costs this estimate leaves out
- Mortgage insurance required on small down payments in some markets.
- Closing costs, valuation and legal fees, paid once when you buy.
- Maintenance and repairs, which are real costs of ownership even though no bill arrives each month.
- Rate changes on variable or adjustable loans. Test a higher rate to see how exposed you are.
Property tax and insurance change over time, so treat the monthly total as a starting budget rather than a fixed figure.
Using the result well
Compare terms by total interest, not only by the monthly payment. A 30-year loan has the lowest payment but the highest interest cost; a 15-year loan raises the payment and cuts interest sharply. Try both, then check how much cash you would still hold after the down payment and closing costs. For the affordability side, see the house affordability calculator, and to examine every month of a loan use the amortization calculator.
Worked example
A 350,000 home with 20% down, a 6.5% fixed rate over 30 years, 4,200 a year in property tax, 1,500 a year in insurance and 200 extra paid toward principal each month.
Inputs
| Home price | 350000 |
|---|---|
| Down payment | 20 |
| Down payment is a | Percent of price |
| Annual interest rate | 6.5 % |
| Loan term | 30 years |
| Property tax per year | 4200 |
| Home insurance per year | 1500 |
| HOA or service charge per month | 0 |
| Extra payment per month | 200 |
Result
Principal and interest 1,769.79, plus any tax, insurance and HOA you entered.
| Loan amount | 280,000.00 |
|---|---|
| Down payment | 70,000.00 (20.0% of price) |
| Principal and interest | 1,769.79 |
| Property tax (monthly share) | 350.00 |
| Insurance (monthly share) | 125.00 |
| Extra principal payment | 200.00 |
| Total interest over the loan | 255,841.38 |
| Time to pay off | 22 years 9 months |
| Interest saved by extra payments | 101,283.19 |
| Months saved | 87 |
Yearly breakdown of principal and interest
| Year | Principal paid | Interest paid | Balance at year end |
|---|---|---|---|
| Year 1 | 5,602.44 | 18,035.05 | 274,397.56 |
| Year 2 | 5,977.64 | 17,659.84 | 268,419.92 |
| Year 3 | 6,377.98 | 17,259.51 | 262,041.94 |
| Year 4 | 6,805.12 | 16,832.36 | 255,236.82 |
| Year 5 | 7,260.87 | 16,376.61 | 247,975.94 |
| Year 6 | 7,747.15 | 15,890.34 | 240,228.79 |
| Year 7 | 8,265.99 | 15,371.50 | 231,962.81 |
| Year 8 | 8,819.58 | 14,817.91 | 223,143.23 |
| Year 9 | 9,410.24 | 14,227.24 | 213,732.99 |
| Year 10 | 10,040.46 | 13,597.02 | 203,692.52 |
| Year 11 | 10,712.89 | 12,924.59 | 192,979.63 |
| Year 12 | 11,430.35 | 12,207.13 | 181,549.28 |
- Property tax, insurance and HOA figures are the amounts you entered, divided by 12. Escrow accounts and local rules can differ.
Financial disclaimer: Results are estimates for planning and education. They are not financial, tax or legal advice. Fees, taxes, rates and rules vary by lender, product and country, so confirm figures with your provider or a qualified adviser before making decisions.
Frequently asked questions
How is a monthly mortgage payment calculated?
The principal and interest part uses the annuity formula with the monthly rate and the number of payments. Property tax, insurance and association fees are then added as monthly amounts.
Does this mortgage calculator include property tax and insurance?
Yes, if you enter yearly amounts for them. They are divided by 12 and added to the principal and interest payment. Leave them blank to see principal and interest only.
How much interest do extra payments save?
It depends on the rate, the remaining term and when you start. The result compares your plan with the same loan without extras, so you can see the interest and months saved.
Is a bigger down payment always better?
It lowers the loan, the monthly payment and total interest, and it may remove mortgage insurance. But it also uses cash that you may need for repairs or emergencies, so keep a reserve.
Why is my lender's payment different from this estimate?
Lenders may include mortgage insurance, round figures differently, use a different payment schedule or have a different tax and insurance estimate. Ask for the official loan estimate.
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References and sources
- Consumer Financial Protection Bureau: guides on mortgages, loan estimates and closing costs. Link
- Standard annuity (amortization) formula, as found in introductory finance textbooks.