How Mortgage Payments Are Calculated (PITI)
Every monthly mortgage payment has four components, commonly referred to as PITI:
- Principal — The portion that reduces your loan balance. Early in the loan, this is a small fraction of your payment; it grows over time as interest decreases.
- Interest — The cost of borrowing money. Calculated as your annual rate divided by 12, multiplied by your remaining balance.
- Taxes — Your annual property tax in Utah divided by 12. Most lenders collect this in escrow.
- Insurance — Homeowners insurance protects your property. If your down payment is less than 20%, you also pay private mortgage insurance (PMI).
The principal and interest portion uses this amortization formula: M = P[r(1+r)^n] / [(1+r)^n – 1], where P is the loan amount, r is the monthly interest rate, and n is the total number of payments.
How Your Down Payment Affects Your Monthly Payment
Your down payment directly impacts your mortgage in three ways:
- Lower loan amount — A larger down payment means you borrow less, reducing both principal and interest in every payment.
- No PMI above 20% — Private mortgage insurance typically costs 0.3% to 1.5% of your loan amount per year. Putting 20% or more down eliminates this cost entirely.
- Better interest rates — Lenders often offer lower rates to borrowers with larger down payments because they represent lower risk.
For example, on a $450,000 Utah home at 6.75%, increasing your down payment from 5% to 20% saves approximately $380 per month (including eliminated PMI). Over 30 years, that adds up to more than $136,000.
Utah offers several down payment assistance programs that can help first-time home buyers cover part or all of the down payment. These programs can make homeownership accessible even with limited savings.
How Your Credit Score Impacts Mortgage Rates
Your credit score is one of the biggest factors in the interest rate you receive. Here is a general breakdown of how scores map to rates:
| Credit Score | Rate Impact | Monthly Difference* |
|---|---|---|
| 760+ | Best available rates | Baseline |
| 720–759 | +0.125%–0.25% | +$30–$65 |
| 680–719 | +0.25%–0.5% | +$65–$130 |
| 640–679 | +0.5%–1.0% | +$130–$260 |
| 620–639 | +1.0%–1.5% | +$260–$395 |
*Based on a $400,000 loan amount over 30 years. Actual rates vary by lender and loan type.
Different conventional loans and FHA loans have different minimum credit score requirements. FHA loans accept scores as low as 580 with 3.5% down, while conventional loans typically require 620 or higher.
Utah Property Tax Rates by County
Utah has some of the lowest property tax rates in the United States. However, rates vary significantly by county. Here are the approximate effective tax rates for Utah's most populated counties:
| County | Avg. Effective Rate | Annual Tax on $450K Home |
|---|---|---|
| Salt Lake County | 0.67% | $3,015 |
| Utah County | 0.52% | $2,340 |
| Davis County | 0.62% | $2,790 |
| Weber County | 0.69% | $3,105 |
| Washington County | 0.50% | $2,250 |
| Cache County | 0.55% | $2,475 |
| Iron County | 0.53% | $2,385 |
| Summit County | 0.42% | $1,890 |
Use the calculator above to enter your county's tax rate for a more accurate estimate. If you are buying in Utah County (Provo, Orem, Lehi, Spanish Fork), a rate of 0.52% is a good starting point.
When to Use This Calculator vs. Getting a Real Quote
This mortgage calculator gives you a reliable estimate, but it cannot replace a personalized quote from a loan officer. Here is when each option makes sense:
Use this calculator when you want to:
- Explore different price ranges before house hunting
- Compare 15-year vs. 30-year loan scenarios
- Understand how your down payment changes the monthly cost
- Get a ballpark number before reaching out to a lender
A real quote from Felix Vivanco accounts for factors this calculator cannot: your actual credit score, current lender pricing adjustments, loan-level pricing adjustments (LLPAs), specific loan program eligibility, and any down payment assistance you may qualify for.