Mortgage Guides — Payment Formula, PITI & First-Time Buyers
Everything you need to understand mortgages: the payment formula, how taxes and insurance affect your monthly cost, and a complete guide for first-time homebuyers.
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Guides
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Calculators
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FAQs
Mortgage Guides & Explanations
Mortgage Payment Formula Explained
The exact math behind monthly mortgage payments: principal, interest, amortization, and how to calculate it by hand.
Mortgage Calculator with Taxes & Insurance
How to calculate your true monthly housing cost including property taxes, homeowners insurance, and PMI.
Mortgage Calculator Guide (2025)
Complete guide to using a mortgage calculator: what inputs matter, how to compare loan options, and common mistakes.
Mortgage Calculator for First-Time Buyers
Step-by-step guide for first-time homebuyers: how much house you can afford, down payment, and closing costs.
Mortgage Calculators
15-Year vs 30-Year Mortgage: $300,000 Loan at 7%
30-Year
Lower Payment$1,996/mo
15-Year
Less Interest$2,696/mo
Frequently Asked Questions
How is a monthly mortgage payment calculated?
Monthly payment = P × [r(1+r)^n] / [(1+r)^n − 1], where P = loan amount, r = monthly interest rate, n = number of payments. For a $300,000 loan at 7% for 30 years: ~$1,996/month.
What is included in a mortgage payment (PITI)?
PITI stands for Principal, Interest, Taxes, and Insurance. Your lender collects taxes and insurance in escrow. PMI (private mortgage insurance) is added if your down payment is less than 20%.
How much house can I afford?
A common rule is the 28/36 rule: spend no more than 28% of gross monthly income on housing costs, and no more than 36% on total debt. For a $6,000/month income, max housing = $1,680/month.
Is a 15-year or 30-year mortgage better?
A 15-year mortgage has higher monthly payments but saves tens of thousands in interest. A 30-year mortgage has lower payments but costs more overall. Choose based on your cash flow and financial goals.