Principal and Interest Calculator for Mortgage

What "Principal and Interest" Means (and How It Differs From PITI)

Principal is simply the amount you borrowed and still owe. Interest is what your lender charges for the privilege of borrowing it, calculated as a percentage of whatever principal balance remains. Add those two together and you get "P&I" — the pure cost of the loan itself, with nothing else layered on top.

Your total monthly mortgage payment is usually a bigger number than P&I alone, because most lenders bundle in a few more charges under something called PITI:

• Principal — repayment of the amount you borrowed
• Interest — the lender's charge for lending you the money
• Taxes — your share of annual property taxes, often collected monthly and held in escrow
• Insurance — homeowners insurance premiums, and often private mortgage insurance (PMI) if your down payment was under 20%

Notice that only the first two letters of PITI — Principal and Interest — describe the loan itself; the last two describe costs that exist independently of the loan and would apply no matter which lender you financed with.

The calculator on this page deliberately shows only P&I — no escrow, no PMI, no HOA — because that's the number that answers what most homeowners are actually asking: what does it cost to borrow this much money, at this rate, for this many years? If you want the full picture including taxes and insurance, our mortgage amortization calculator with taxes and insurance layers those costs back in on top of the same P&I math.

The Principal and Interest Formula, With One Worked Example

Every fixed-rate loan uses the same formula to set a P&I payment that stays constant for the life of the loan:

M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1]

• P is your loan principal (home price minus down payment)
• r is your monthly interest rate (annual rate ÷ 12)
• n is your total number of monthly payments (30-year loan = 360, 15-year = 180)

Say you borrow $350,000 at 6.75% over 30 years. Plug those numbers in — r = 0.005625, n = 360 — and the formula resolves to a monthly principal-and-interest payment of $2,270.09, every month, for 360 months, unless you refinance, recast, or add extra principal payments along the way.

Over the full 30 years you'd pay $817,233.60 in total: the $350,000 you borrowed plus $467,233.60 in interest. That interest figure is the real cost of borrowing — larger than the loan itself — and it's exactly what the calculator above computes automatically the moment you enter your own loan amount, rate, and term.

Term length changes that trade-off dramatically. Take the same $350,000 loan at 6.75%, but over 15 years instead of 30: the monthly P&I payment rises to $3,097.18 — about $827 more per month — while total interest paid falls all the way to $207,492.96, a savings of roughly $259,741 over the life of the loan. Neither term is objectively better; it's a trade-off between monthly cash flow today and total interest paid over time, and it's worth running with your own numbers using the term selector in the calculator above.

Why Your P&I Payment Never Changes, Even Though the Split Shifts Every Month

Here's the part that confuses a lot of borrowers: your P&I payment is locked for the life of a fixed-rate loan, but the interest and principal portions inside that payment change every single month.

Take that same $350,000 loan at 6.75%. In month 1, your $2,270.09 payment splits into roughly $1,968.75 in interest and just $301.34 in principal — interest eats up nearly 87% of the payment, because you owe interest on the full $350,000 balance. By month 181 — about 15 years in, with roughly $256,534 still owed — that same $2,270.09 payment now splits into about $1,443.00 in interest and $827.09 in principal. The principal share has nearly tripled.

Nothing about the payment amount changed. What changed is the balance the interest is calculated against: as you pay down principal, the amount you owe interest on shrinks, so a growing share of every fixed payment can go toward principal instead. This shift is the entire mechanism behind mortgage amortization, and it explains a few things worth knowing:

• Extra payments made early in a loan save far more interest than the same extra dollar paid in year 25, because you're shrinking a bigger balance over more months.
• A 15-year loan builds equity dramatically faster than a 30-year loan at the same rate, since more of every early payment goes to principal from month one. Compare the two side by side on our 15-year and 30-year amortization schedules.
• Your loan balance drops slowly at first and then rapidly in the loan's final years — the classic amortization curve.

You can see this curve directly in the chart built into the calculator above: plot your own loan's principal and interest lines side by side, and you'll watch the interest line start high and fall while the principal line starts low and climbs, crossing roughly midway through the loan's term — earlier on a 15-year loan, later on a 30-year loan at a higher rate. That crossover point, not the payment amount, is really what "building equity faster" means in practice.

Why Lenders Care About Your P&I Number Specifically

When an underwriter qualifies you for a loan, P&I is the figure that goes into your debt-to-income (DTI) ratio calculation — not your full PITI payment in isolation, but P&I combined with taxes, insurance, and any HOA dues, compared against your gross monthly income. Lenders generally want that combined housing payment under roughly 28% of gross monthly income, and your total debt load (including car payments, student loans, and credit cards) under about 36-43%, though exact thresholds vary by loan program.

This is why isolating P&I matters even though it's not the whole payment: it's the one piece of your housing cost that's fixed by your rate and term alone, so it's the cleanest number to test "what if" scenarios against before you apply. Raise the loan amount, shorten the term, or test a different rate in the calculator above, and you can see immediately how each choice moves the P&I figure a lender will eventually weigh against your income — before an underwriter ever runs the numbers for real.

How We Calculate These Numbers

Every figure on this page and in the calculator above comes from the standard fixed-rate amortization formula, run month by month rather than approximated — the same method lenders use to generate the amortization schedule you receive at closing. We check every formula against published amortization tables before publishing, and the calculator recalculates instantly whenever you change an input — no rounding shortcuts, no lookup tables. This page is reviewed periodically to keep the formula, worked examples, and citation current; see the review date in the byline above. For the full formula-by-formula breakdown, including how extra payments change the math, see our calculation methodology page.

For an independent explanation of how a P&I payment differs from a full monthly mortgage payment, see the Consumer Financial Protection Bureau's guide, "On a mortgage, what's the difference between my principal and interest payment and my total monthly payment?" . You can also run your full monthly cost — P&I plus taxes, insurance, and PMI — through our main mortgage amortization calculator.