How mortgage interest is calculated each month
Why your early payments are mostly interest, and when the balance starts falling faster.
Real monthly payment · Principal + Interest + Tax + Insurance
What will this house cost you each month?
The price tag isn't your payment. HomMetra adds property tax, insurance and HOA to interest and principal — so the number you see is what you'll actually budget for.
—
Estimated total monthly payment
—Principal & interest
—Property tax
—Insurance
—HOA
—Loan amount
—Total interest
—Total paid
15-year vs 30-year
15 years—
Total interest —
30 years—
Total interest —
Amortization schedule
| Year | Payment | Principal | Interest | Balance |
|---|
Estimate only — rates, taxes and insurance vary by lender, state and property. This is not loan approval.
Why PITI
The payment your lender quotes isn't the whole cost
Principal and interest are only half the story. Property tax, insurance and HOA are usually escrowed into your real monthly payment. Skip them and your budget is off by hundreds of dollars a month.
- Price + down payment set your loan amount.
- Rate + term set your principal & interest.
- Tax, insurance & HOA are added monthly for the true PITI.
- Compare terms, then download the amortization report.
Mortgage questions
How is a mortgage monthly payment calculated?
Using the standard amortization formula: payment = loan × rate/12 ÷ (1 − (1 + rate/12)^−months). This produces an even payment where each month you pay a little more principal and a little less interest.
What does PITI stand for?
Principal, Interest, Taxes and Insurance. It's the total a lender typically escrows into your monthly payment — the realistic number, not just the principal-and-interest figure lenders quote up front.
Why is a 15-year mortgage cheaper overall?
A shorter term means interest compounds over far fewer months, so while the monthly payment is higher, the total interest paid is usually less than half of a 30-year loan at the same rate.
How much should my down payment be?
20% avoids private mortgage insurance for most conventional loans. Smaller down payments are common (3–10%), but they raise the loan amount and add PMI until you reach 20% equity.