What is included?
The estimate includes principal, interest, annual tax divided by 12, annual insurance divided by 12, and an optional PMI estimate when the down payment is below 20%. PMI rules and cancellation depend on the loan; replace the allowance with lender figures.
Mortgage payment versus ownership cost
This tool excludes HOA dues, maintenance and utilities. Add those expenses in the homeownership cost calculator. Upfront costs belong in the buyer closing costs calculator.
Fixed-rate formula
Monthly principal and interest = L × r ÷ (1 − (1 + r)−n), where L is the loan, r is the annual interest rate divided by 1200, and n is the term in months. At 0% interest, the payment is L ÷ n.
Source: CFPB Loan Estimate explainer. Example values are illustrative, not live lender quotes.