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What does this calculator estimate?
Estimate your monthly mortgage payment including principal, interest, taxes, and insurance. Enter loan amount, rate, and term for a full breakdown. Private.
Where escrow can be a fifth of the payment, and why it moves
In many US markets the fixed loan piece and everything else sit nearly level. On a $450,000 house at 6.5% with 20% down, principal and interest runs about $2,275. Add property tax at 1.1% of assessed value ($412 monthly), homeowner's insurance at about $120 a month, and in a flood zone or with an HOA another $40 to $350 on top, and the total is $2,850 to $3,150, which means escrow is 20% to 28% of the total payment. First-time buyers routinely budget around the P&I number and then meet the tax bill alone when it comes.
Escrow amounts remarket every year, which is why the payment you signed is not the payment you will be making in year three. Insurers raise premiums by 10% to 30% in some regions after a rate review, and county assessments adjust taxes at reassessment intervals that range from every year to every five years depending on the state. That is not a rate move, and a fixed-rate mortgage does not fix it. If you want to see the impact before it lands, run the current P&I alone, then add your actual tax bill divided by 12 and your actual annual premium divided by 12; the difference between that and the lender's initial escrow estimate is where next year's payment increase will come from.
Points, buydowns, and how to compute a break-even most buyers skip
One discount point costs 1% of the loan amount and typically lowers the rate by 0.25 percentage points, though that exchange rate moves with the market and your lender will quote one explicitly. On a $380,000 loan, one point is $3,800 in cash. If it drops the payment from $2,403 to $2,339, that is $64 a month, and the point pays for itself in about 59 months. Sell the house before that, and you paid $3,800 for nothing. Hold it for 20 years and you net roughly $11,560 in savings, minus the opportunity cost of having had $3,800 tied up instead of invested.
Points are one option; seller-paid buydowns are the second. A 2-1 buydown (seller-funded) drops your rate by 2 points in year one and 1 point in year two before it returns to note rate. This is pure seller cash used as a rate subsidy, and it is frequently worth more than an equivalent price cut. A $10,000 seller concession applied to a 2-1 buydown on a $400,000 loan can hold your year-one payment at roughly $2,270 versus $2,528 at the full note rate, a difference of about $3,080 over the first 24 months. The calculator can price each of these loans separately; what it will not tell you is that the buydown's savings expire and the permanent point does not, so compare on years 1 through 5, not month 1.
Extra payments: what $200 a month actually does at various stages of a loan
Extra principal shortens a loan work best early in the term, when interest is the dominant part of each payment. On a $380,000 loan at 6.5% for 30 years, adding $200 a month in principal from month one retires the loan in about 286 months instead of 360, saves roughly $84,000 in interest, and finishes nearly six years early. Add the same $200 starting in year ten and the credit shrinks: the loan at that maturity has already paid roughly 45% of its lifetime interest, and each principal payment now saves 6.5% a year for a shorter remaining term, roughly $44,000 over the rest.
Whether it is worth doing depends entirely on the benchmark. Holding cash in a savings account earning 4% while prepaying a 6.5% mortgage is a 2.5-point annual loss. Holding it in an index fund earning a historical average near 7% while prepaying is a roughly half-point annual gain. Neither comparison includes liquidity: money sent to a lender is not retrievable without a refinance, and an emergency fund should come first. A practical split many households use: fund the emergency account to six months of expenses first, then send roughly the difference between this calculation and the opportunity cost of what the cash would otherwise earn, entered honestly each January when the numbers have changed.
Refinancing in year eight: why the mathematics is worse than the rate says
A 30-year mortgage front-loads your interest payments, so after eight years you have paid roughly $181,000 of interest on a $380,000 loan and built equity slowly. Refinancing at that point resets the amortization clock to zero unless you choose a shorter term. The rate cut can be real and the cost still net negative. A concrete case: 7.25% at balance $335,000, in year eight. Refinancing to 6.0% over a fresh 30 years drops the payment from about $2,285 to $2,010, a saving of $275 a month. But over 360 new payments, you pay about $110,000 more in total interest than riding the original note to term, even though the rate is 1.25 points lower.
The fix is to refinance into a shorter product instead of a fresh 30. The same borrower at 6.0% over 22 years pays roughly $2,150 a month, which is more than the 30-year refinance but less than the current note, saves about $46,000 in remaining interest, and holds the same payoff date. This calculation takes 60 seconds with the calculator: enter the remaining balance, the offered rate, and the remaining term rather than a generic 30. A refinance offer quoted only as a new 30-year note at a lower rate is structurally the worst option for a borrower partway through the term, and lenders do not volunteer the comparison unless you ask for it.
How this calculator works
Assumptions to verify
- Principal and interest only. Property tax and homeowners insurance are not included unless you enter them separately, because they vary by county and by policy.
- The rate is treated as fixed for the full term. An adjustable-rate mortgage will reset and the later payments will differ.
- Private mortgage insurance is excluded. If your down payment is under 20 percent your actual payment will be higher.
- Extra payments, biweekly schedules and escrow adjustments are not modelled in the base figure.
Read the guide
Mortgage Payment Estimates: Principal, Interest, Taxes, and Insurance
Open the guide →Cite this tool
BoringToolsKit. “Mortgage Payment Calculator.” boringtoolskit.com/mortgage-payment-calculator/ (reviewed July 2026). Free to reference in articles, syllabi, and answer posts with a link.
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