P&I vs. Full Housing Cost
The calculator shows loan payment — not every housing bill
A mortgage calculator gives you principal and interest. A house gives you principal, interest, property taxes, homeowners insurance, possibly mortgage insurance, possibly an HOA fee, and a repair bill roughly whenever you have other plans. The gap between those two numbers surprises most first-time buyers.
What the payment on screen covers
Enter a $340,000 loan at 6.5% for 30 years and you get about $2,149 a month. That figure is principal and interest only, usually written as P&I.
It is the amount owed to the lender for the loan itself, and it is genuinely fixed for the life of a fixed-rate mortgage.
Everything else attached to the house is separate, variable, and largely outside the lender's control.
What gets added on top
Property taxes on a $400,000 home commonly run 1% to 2% of value annually, so $333 to $667 a month depending on where you live.
Homeowners insurance typically adds $100 to $250 a month, and has been rising faster than that in several states. Mortgage insurance adds roughly $130 to $250 a month when you put down less than 20%.
An HOA, if there is one, ranges from $50 for a neighborhood association to $600 for a condo with amenities. Add those up and the $2,149 P&I becomes $2,800 to $3,300 in real life.
- P&I is fixed on a fixed-rate loan; the other items are not.
- Property taxes commonly run 1% to 2% of home value per year.
- Insurance often adds $100 to $250 a month and has been climbing.
- PMI applies below 20% down and can be removed later.
- Maintenance averages roughly 1% of home value annually.
The item nobody budgets for
Maintenance is the line that turns a comfortable payment into a tight one. A common planning figure is 1% of the home's value per year, which is $333 a month on a $400,000 house.
Some years you spend nothing. Then the water heater, the roof, and the HVAC all reach end of life within eighteen months of each other and you spend $14,000.
Setting aside that amount monthly, in a separate account, is what keeps home repairs from becoming credit card balances.
The costs that arrive before you move in
Closing costs typically run two to five percent of the purchase price, which on a $400,000 home is somewhere between $8,000 and $20,000 due at signing.
That is separate from the down payment and separate from the moving expenses, the initial repairs, and the furniture for rooms you did not previously have.
People who budget precisely to their down payment often arrive at closing short, or arrive with nothing left and immediately put the first repair on a credit card.
A reasonable rule is to have the down payment, the closing costs, and a few thousand dollars beyond that before you commit to a purchase price.
Building the number you should actually use
Take the P&I from this calculator. Add the property tax from the listing or the county assessor site, divided by twelve.
Add an insurance quote — a real one, not an estimate, since rates vary enormously by location and by house. Add PMI if your down payment is under 20%, and any HOA fee.
Finally add 1% of the purchase price divided by twelve for maintenance. That total is what to compare against your income, and it is the number your budget will actually feel.
Comparing honestly against rent
A $2,200 rent looks cheaper than a $2,149 P&I once you add everything, and in the first few years it often is. Renters do pay taxes and insurance indirectly through the rent, but they do not pay the repair bills or the transaction costs.
The advantage shifts over time. Your P&I never rises, while rent has historically climbed with inflation, so the same $2,200 rent is closer to $2,950 in ten years at 3%.
That crossover is the real case for buying, and it takes years to arrive. Comparing only the first year's numbers makes buying look worse than it is; ignoring the extra costs makes it look better.
Try these inputs
- Baseline loan: $340,000, 6.5%, 30 years
- Smaller loan: $300,000, 6.5%, 30 years
- Larger loan: $400,000, 6.5%, 30 years