How this works
Principal and interest use the standard amortization formula: the loan amount times r(1+r)n ÷ ((1+r)n − 1), where r is the monthly rate and n the number of payments. Property taxes and insurance are divided by 12. Private mortgage insurance is added only when the down payment is under 20%, at the rate you enter; lenders set the real figure.
The rate starts at Freddie Mac’s weekly average for a 30-year fixed mortgage (the Primary Mortgage Market Survey), updated each time we import it. Your own rate depends on your credit, loan type and points.
Questions
How is a mortgage payment calculated?
Principal and interest come from the standard amortization formula; taxes, insurance, HOA dues and any mortgage insurance are added on top.
Why is there PMI?
Most conventional loans with less than 20% down require private mortgage insurance until you reach 20% equity. The calculator adds an estimate; your lender quotes the real cost.
Where does the rate come from?
Freddie Mac’s weekly Primary Mortgage Market Survey average for a 30-year fixed loan.