Find your full monthly mortgage payment — principal, interest, taxes, insurance, and PMI — and see exactly how much interest you'll pay over the life of the loan.
Your monthly mortgage payment has up to five parts — what lenders call PITI plus extras. Principal reduces your loan balance. Interest is the lender's fee, and dominates the early years. Taxes (property taxes, typically 1–2% of home value annually) and Insurance (homeowners coverage, typically $1,200–$2,500/year) are collected monthly into escrow. If your down payment is under 20%, you'll also pay PMI until you reach 20% equity. And if the property has an HOA, those fees stack on top.
The bar shows where your payment actually goes each month. Most first-time buyers are surprised that 25–35% of their "mortgage payment" isn't going to the loan at all — it's taxes, insurance, and PMI.
The interest number is the one that shocks people. On a $340,000 loan at 6.8% over 30 years, you'll pay roughly $458,000 in interest alone — more than the loan itself. Over the life of the loan, you'll pay $798,000 total on a home you bought for $425,000. That's not a flaw of mortgages; it's just how 30-year amortization works at current rates.
The classic lending guideline is that your total monthly housing payment (PITI plus HOA) should stay under 28% of your gross monthly income. The expanded version — the 28/36 rule — adds that total debt payments (housing plus car, student loans, credit cards) should stay under 36%. Lenders will approve you for more than this comfortably allows, so treat these as your own ceiling, not the bank's.
If your payment is pushing past 28% of gross income, you have three levers: a larger down payment (reduces principal and may eliminate PMI), a longer loan term (lower monthly payment but vastly more total interest), or a less expensive home. Most buyers will be happier in the long run pulling the third lever.