Last updated 3 September 2026
What makes up the payment
Principal and interest pay down the loan itself, using the standard amortising-loan formula. Property tax and home insurance are usually collected monthly and held in escrow by the lender, who pays the actual bills when due. PMI (Private Mortgage Insurance) applies when the down payment is below 20% of the home price, protecting the lender against default — it typically drops off once enough equity builds up.
Fixed, variable, and what happens at the end of a fix
A fixed rate holds the payment steady for an agreed period. A variable or tracker rate moves with a reference rate, so the payment can rise or fall during the term. The decision is largely about how much certainty you need rather than about predicting rates, which very few people do well.
What catches borrowers out is the end of a fixed period. In many markets the loan then reverts to a standard variable rate that is materially higher, and the payment jumps on a date set years earlier. Calculating what the payment would be at two or three percentage points above your current rate is a worthwhile exercise before committing — if that figure is unaffordable, the loan is riskier than the initial payment suggests. Note also that the payment shown here is principal and interest only; property tax, insurance and any mortgage insurance are additional.
Assumptions and limitations
What the maths does. Principal and interest come from the standard amortising-loan formula at a fixed rate for the full term. Property tax is spread evenly across the year from the percentage you enter, and insurance is your annual figure divided by twelve.
PMI is modelled with a single US-style assumption. When the deposit is under 20% of the price, the tool adds private mortgage insurance at 0.5% of the loan per year. That is a rough middle figure for the United States only. Real PMI rates vary with credit score and loan-to-value, and PMI as a concept does not exist in most countries — the UK, for example, has no direct equivalent for ordinary residential mortgages, and lenders elsewhere price loan-to-value risk into the interest rate instead. If PMI does not apply where you live, treat that line as zero.
What is not included. Arrangement, valuation, legal and broker fees; stamp duty or transfer tax; HOA or service charges; ground rent; maintenance and repairs; mortgage life insurance; early-repayment charges; and any rate change after a fixed period ends. On a variable or tracker mortgage the payment will move.
Assumptions that apply to every finance calculator here
Currency is a display choice only. Changing the currency symbol relabels the output; it does not convert anything and no exchange rate is used anywhere in this tool.
Tax and lending rules vary by country. Nothing here is adjusted for the rules where you live — income tax, capital gains tax, stamp duty, lending caps, affordability tests and consumer-credit regulation all differ, and several of them can change the real answer materially.
Rates and returns are not guaranteed. Any rate you enter is treated as fixed for the whole period. Real interest rates move, real investment returns vary year to year and can be negative, and past performance does not predict future results.
This is an estimate, not advice. The result is arithmetic on the numbers you typed. It is not an offer, a quote, an approval, an investment recommendation or financial advice. Before committing to anything, get figures from the actual lender, provider or a qualified adviser in your country.
Common questions
What is PMI and when do I need it?
Private Mortgage Insurance protects the lender, not you, and is typically required when the down payment is below 20% of the home price. This calculator estimates it at roughly 0.5% of the loan annually, a common ballpark — actual rates vary by lender and credit profile.
Why is my payment more than just principal and interest?
Most lenders collect property tax and homeowners insurance monthly along with the loan payment, holding it in escrow and paying the bills on your behalf when they're due. That's why the full monthly cost is usually higher than the loan payment alone.
Does a bigger down payment always help?
Generally yes — it lowers the loan amount, can eliminate PMI once it reaches 20%, and reduces total interest paid over the loan's life. It's a trade-off against keeping cash available for other things, which is a personal decision this calculator can't make for you.