California Mortgage Calculator

How California mortgage payments are calculated

The four parts of a California mortgage payment (PITI)

Every California mortgage payment is the sum of four components, sometimes called PITI:

1. Principal: The portion that pays down your loan balance. Higher early in the loan? No — actually higher later. Early payments are mostly interest.
2. Interest: What the lender charges for borrowing. Calculated monthly on the remaining balance.
3. Taxes: Property taxes, paid through an escrow account. California's effective rate averages 1.1% of purchase price, sometimes higher with Mello-Roos.
4. Insurance: Homeowners insurance, also escrowed. Typically $1,200–$3,000/year in California; higher in wildfire zones.

If your down payment is less than 20% on a conventional loan, add a fifth component: PMI (private mortgage insurance), typically 0.3% to 1.5% of the loan amount annually.

The amortization formula

The monthly principal-and-interest payment uses this formula:

M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1]

Where M = monthly payment, P = principal (loan amount), r = monthly interest rate (annual rate ÷ 12), and n = total number of payments (years × 12). Our calculator runs this formula in JavaScript every time you adjust an input.

How affordability is determined

Lenders use two debt-to-income (DTI) ratios:

• Front-end DTI: Housing payment ÷ gross monthly income. Typically capped at 28% conservatively, 36% moderately.
• Back-end DTI: Total monthly debt (housing + car + student + credit cards) ÷ gross income. Conforming loans cap at 43%; FHA and non-QM go to 50%.

Save Financial's calculator uses back-end DTI to compute the maximum home price you can afford given your income, debts, and down payment.

Frequently asked questions