How the mortgage payment is calculated
The loan is the home price minus your down payment. The principal and interest part uses the standard amortization formula M = P·i / (1 − (1 + i)^−n), where i is the monthly rate and n the number of months. Property tax and insurance are added as one-twelfth of their yearly cost.
What this calculator leaves out
Private mortgage insurance (often required with under 20% down), HOA fees and closing costs vary by lender and location. Add them to your budget separately. Lenders compare offers by APR, which includes fees.