What PITI means
Lenders quote principal and interest, but your actual monthly bill is PITI: principal, interest, property tax and home insurance, plus HOA dues if any. Tax and insurance are usually collected monthly into escrow, so the number that leaves your account is bigger than the loan payment alone.
Worked example
A 400,000 home with 20% down at 6.5% over 30 years means a 320,000 loan. Principal and interest come to about 2,023 a month; add 400 property tax, 150 insurance and no HOA, and the real monthly bill is about 2,573.
What the calculator leaves out
Private mortgage insurance is not included — with less than 20% down, budget roughly 0.5 to 1% of the loan per year extra. Property tax and insurance also rise over time, so revisit the numbers yearly. The 28% rule (housing under 28% of gross income) is a useful sanity check on the result.
Frequently asked questions
How is a mortgage payment calculated?
With the amortisation formula on the loan amount, rate and term, then property tax, insurance and HOA are added on top. The calculator does all of it.
What is a good down payment?
20% avoids private mortgage insurance, but many buyers put down 3 to 10% and pay PMI for a while. Run both scenarios.
Does the payment stay the same?
Principal and interest are fixed on a fixed-rate loan, but tax, insurance and HOA can all rise, so the total creeps up.
How much house can I afford?
A common rule is housing costs under 28% of gross monthly income and all debts under 36 to 43%. The affordability calculator checks the second part.