How it works
What this estimate calculates
Principal and interest are calculated with the standard fixed-rate amortization formula using the loan amount, monthly interest rate, and number of monthly payments. Estimated property tax, homeowners insurance, mortgage insurance, and HOA dues are then converted to monthly amounts and added when provided.
Assumptions to keep in mind
- The interest rate remains fixed and payments are made monthly for the full loan term.
- Taxes, insurance, dues, and mortgage-insurance costs are level estimates. Actual PMI can end under cancellation rules that this model does not project.
- Utilities, maintenance, and unentered closing costs are not part of the monthly total.
Reviewed references
Sources behind this calculator
Last reviewed: . These references support the concepts and context; their publishers do not review or endorse TrueCost.
- Investor Reporting Manual: Amortization exhibits (opens in a new tab)Fannie Mae
The fixed-payment formula and monthly principal-and-interest amortization.
- Principal and interest versus total monthly payment (opens in a new tab)Consumer Financial Protection Bureau
Including taxes, insurance, mortgage insurance, and possible HOA dues alongside principal and interest.
- When can I remove private mortgage insurance (PMI)? (opens in a new tab)Consumer Financial Protection Bureau
Why real PMI may end rather than remain level for the full loan term.
Questions people ask
What is included in a monthly mortgage payment?
A complete estimate can include principal, interest, property tax, homeowners insurance, mortgage insurance, and HOA dues. Your lender statement may group some of these costs in an escrow payment.
How does a larger down payment affect the result?
A larger down payment reduces the amount borrowed, which usually lowers principal and interest. It may also change whether mortgage insurance is required, depending on the loan.
Why might my actual payment change?
Property taxes, insurance premiums, and adjustable loan terms can change. A lender quote is the better source for the terms and costs of a specific loan.
Use the result as a starting point
Try a conservative scenario and an optimistic one. If the decision only works under one narrow set of assumptions, that is useful information. For a purchase, loan, tax, or investment decision, confirm the final figures with current documents and an appropriately qualified professional.
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