How Your Monthly Mortgage Payment Is Calculated
Every fixed-rate mortgage payment is split into two parts: principal (paying down the loan balance) and interest (the lender's charge for lending you money). Early in the loan, most of your payment goes to interest. Over time, the split shifts toward principal — this is called amortization.
The formula is straightforward but easy to mis-punch on a calculator. Enter your numbers above and the math runs instantly. When available, the rate field auto-fills with the latest Freddie Mac Primary Mortgage Market Survey (PMMS) rate.
What Else Goes Into Your Monthly Housing Cost?
Lenders and budgets care about the full PITI:
- Principal & Interest (P&I): The core mortgage payment. Fixed for the life of a fixed-rate loan.
- Property Tax: Varies by county. Typically 0.5–2.5% of assessed value per year. Often escrowed into your monthly payment.
- Homeowner's Insurance: Required by all lenders. Averages $1,500–$2,500/yr for a typical SFR, higher in hurricane/wildfire zones.
- HOA: Applies to condos, townhomes, and some planned communities. Can range from $50 to $500+/mo.
- PMI: Required when your down payment is less than 20% on a conventional loan. Typically 0.3–1.5% of the loan per year.
How Down Payment Affects Your Payment
Every dollar of down payment reduces the loan amount, which reduces both the P&I payment and the total interest you'll pay over the life of the loan. The effect is non-linear because of compounding interest:
- Going from 5% to 10% down on a $300k house at 7% saves ~$100/mo and ~$36k in total interest over 30 years.
- Going from 10% to 20% saves another ~$200/mo and drops PMI entirely.
- Beyond 20%, the marginal benefit of each additional dollar down diminishes — that capital may earn more in a rental property.
Investment Property Mortgage vs. Primary Residence
If you're buying a rental property rather than a primary home, the math shifts:
- Higher rate: Expect 0.25–0.75% above primary- residence rates.
- Larger down payment: Most lenders require 20–25% down for investment properties.
- DSCR qualification: Many investor loans underwrite the property's income, not your W-2. See our DSCR calculator and DSCR loan guide.
Will It Flow is purpose-built for investment properties — it calculates your mortgage payment alongside cap rate, DSCR, cash-on-cash return, and BRRRR analysis so you can see the full deal picture in one place.
Related Free Calculators
- DSCR Calculator — check if your deal meets lender debt service coverage requirements.
- Cap Rate Calculator — see the unleveraged yield on any deal.
- BRRRR Calculator — model capital recovery on a Buy-Rehab-Rent-Refinance-Repeat deal.
- 1% Rule Calculator — quick rent-to-price screen for cash flow deals.
Want the full investment picture?
Will It Flow calculates your mortgage alongside 15+ investment metrics — cap rate, cash-on-cash, DSCR, IRR, BRRRR — in 60 seconds. Free to start.
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