What does a mortgage actually cost?
Full PITI breakdown — principal, interest, property tax, insurance — plus PMI when applicable. See your real monthly payment, not just the loan-only number that lenders advertise.
Loan details
Loan term
Annual property tax as % of home value
Annual
Monthly (optional)
Monthly payment
80% LTV$2,778
Principal & interest of $2,228 plus tax, insurance.
Monthly breakdown (PITI)
- Principal & interest$2,228
- Property tax$425
- Home insurance$125
- Total monthly$2,778
Lifetime cost
- Loan amount$340,000
- Interest paid over 30 years$462,037
- Total of all P&I payments$802,037
Year-by-year
How much of each year goes to principal vs. interest, and your remaining balance.
| Yr | Paid | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $26,735 | $3,555 | $23,180 | $336,445 |
| 2 | $26,735 | $3,806 | $22,928 | $332,639 |
| 3 | $26,735 | $4,075 | $22,659 | $328,564 |
| 4 | $26,735 | $4,363 | $22,371 | $324,201 |
| 5 | $26,735 | $4,672 | $22,063 | $319,529 |
| 6 | $26,735 | $5,002 | $21,733 | $314,527 |
| 7 | $26,735 | $5,356 | $21,379 | $309,172 |
| 8 | $26,735 | $5,734 | $21,000 | $303,437 |
| 9 | $26,735 | $6,140 | $20,595 | $297,298 |
| 10 | $26,735 | $6,574 | $20,161 | $290,724 |
| 11 | $26,735 | $7,038 | $19,696 | $283,686 |
| 12 | $26,735 | $7,536 | $19,199 | $276,150 |
| 13 | $26,735 | $8,068 | $18,666 | $268,082 |
| 14 | $26,735 | $8,639 | $18,096 | $259,443 |
| 15 | $26,735 | $9,250 | $17,485 | $250,194 |
| 16 | $26,735 | $9,903 | $16,831 | $240,290 |
| 17 | $26,735 | $10,603 | $16,131 | $229,687 |
| 18 | $26,735 | $11,353 | $15,381 | $218,334 |
| 19 | $26,735 | $12,156 | $14,579 | $206,178 |
| 20 | $26,735 | $13,015 | $13,720 | $193,163 |
| 21 | $26,735 | $13,935 | $12,800 | $179,228 |
| 22 | $26,735 | $14,920 | $11,814 | $164,308 |
| 23 | $26,735 | $15,975 | $10,760 | $148,333 |
| 24 | $26,735 | $17,104 | $9,630 | $131,229 |
| 25 | $26,735 | $18,313 | $8,421 | $112,916 |
| 26 | $26,735 | $19,608 | $7,127 | $93,308 |
| 27 | $26,735 | $20,994 | $5,741 | $72,314 |
| 28 | $26,735 | $22,478 | $4,256 | $49,836 |
| 29 | $26,735 | $24,067 | $2,667 | $25,768 |
| 30 | $26,735 | $25,768 | $966 | $0 |
AI Analysis
What "PITI" actually means
When lenders advertise a $1,995/month mortgage, they're showing you only P&I — principal and interest. Your real monthly housing cost adds two more expenses: T (property tax) and I (homeowners insurance). Together that's PITI, and on most homes it adds $400–$700 per month on top of the loan-only number.
Add PMI (Private Mortgage Insurance) if your down payment is under 20% of the home price, and HOAdues if you're in a managed community, and the monthly bite gets meaningfully larger. This calculator shows you the full picture.
How interest compounds against you
At today's rates, on a $300,000 loan at 7% over 30 years you'll pay more in interest than the original loan amount. The amortization schedule shifts over time: in early years almost all your payment goes to interest; in the final years almost all of it goes to principal. That's why making a single extra payment per year — applied to principal — can shave 4-7 years off the loan.
15-year vs 30-year mortgages
A 15-year loan has higher monthly payments but dramatically lower lifetime interest. On a $300k loan: a 30-year at 7% costs ~$418k in interest; a 15-year at 6.4% costs ~$167k. The trade-off is monthly cash flow flexibility.
Sources
PMI rules, mortgage disclosure requirements, and the standard Loan Estimate format are governed by the Consumer Financial Protection Bureau — Owning a Home guides. FHA, VA, and conventional loan parameters: HUD Homeownership.
Frequently asked questions
What's a good debt-to-income ratio for a mortgage?
Most lenders prefer your total monthly debt payments (mortgage + car loan + student loans + credit cards) to be under 43% of your gross monthly income. Many will go up to 50% with strong credit and reserves; conservative practice keeps housing alone under 28% of gross income.
Why do I have to pay PMI if my down payment is under 20%?
PMI protects the lender if you default — and lenders see less than 20% down as higher risk. PMI typically costs 0.3-1.5% of the loan amount annually. Once your loan-to-value ratio drops below 78% (through payments and/or home price appreciation), you can request PMI removal.
Should I buy points?
A point costs 1% of your loan amount and typically reduces your rate by 0.25%. The math: divide the cost by your monthly savings to find the break-even point in months. If you'll keep the loan past that point, buying points saves money. If you might refinance or sell sooner, don't.
What about closing costs?
Closing costs typically run 2-5% of the home price, on top of your down payment. They include lender fees, title insurance, appraisal, and prepaid taxes. Some lenders offer no-closing-cost loans in exchange for a slightly higher rate. This calculator doesn't include closing costs in the monthly figure.