How to read the mortgage estimate
The monthly total separates principal and interest from optional costs such as taxes and insurance, PMI or mortgage insurance, HOA dues and extra principal payments. The loan-to-value, one-percentage-point rate comparison and extra-payment payoff estimate help show which inputs move the result most.
Example
For a $400,000 home with $80,000 down, the loan amount is $320,000. At 6% over 30 years, principal and interest are about $1,919 per month before taxes, insurance, PMI, dues or extra principal payments.
Common mistakes
Do not compare homes by principal and interest alone. Property taxes, insurance, mortgage insurance and dues can materially change the monthly cost.
Formula and method
The principal-and-interest payment uses the standard fixed-rate amortization formula. Optional yearly costs and annual PMI are divided by 12, monthly HOA or dues are added directly, and extra principal payments are modeled against the scheduled loan balance.
Assumptions and limitations
This is a planning estimate, not a loan offer. It does not fetch live rates, qualify a borrower, calculate local taxes, include closing costs automatically or determine whether mortgage insurance applies. Enter those values manually when they matter, because property taxes, insurance rules and lending standards vary by market.
References
- Consumer Financial Protection Bureau: mortgage resources, accessed 2026-05-14.
- Consumer Financial Protection Bureau: monthly mortgage payment calculation, accessed 2026-05-14.
Last reviewed: 2026-05-14