Mortgage Calculator
Our Mortgage Calculator helps you estimate your monthly home loan payment,
total interest, and the overall cost of your mortgage — including property taxes,
home insurance, PMI, HOA fees, and the effect of extra payments on your payoff date.
How is the monthly payment calculated?
For a fixed-rate mortgage, the monthly principal & interest payment is calculated with the
standard amortization formula: M = P × r(1+r)n / ((1+r)n − 1),
where P is the loan amount (home price minus down payment), r is the
monthly interest rate (annual rate ÷ 12), and n is the total number of monthly
payments (loan term in years × 12). Each payment first covers that month’s interest on the
remaining balance; the rest reduces the principal. Early in the loan most of the payment is interest,
while later payments go mostly toward principal.
What affects my mortgage payment?
Your payment depends on the home price, down payment, interest rate, and loan term — plus
recurring ownership costs: property taxes, home insurance, private mortgage insurance (PMI, usually
required when the down payment is below 20%), HOA fees, and maintenance. Use the extra-payments
options above to see how paying a little more each month can shorten your loan by years and save
tens of thousands in interest.
Mortgage components explained
Loan amount. This is what you actually borrow: the home price minus your down payment.
On a $400,000 home with 20% down, you borrow $320,000. Lenders cap the loan amount based on your income
and debts — most follow the guideline that housing costs should stay below roughly 28% of gross income.
Down payment. The cash you pay upfront. Putting 20% or more down avoids PMI and usually
earns a better interest rate. Smaller down payments (as low as 3% on some conventional loans) let you buy
sooner, but you pay PMI until your balance falls below 80% of the home’s price, and you borrow more,
which means more interest over the life of the loan.
Loan term. How long you have to repay: 30 years is most common, followed by 15 and 20.
Shorter terms carry lower rates and dramatically less total interest, but higher monthly payments.
On a $320,000 loan at 7%, a 30-year term costs about $446,000 in interest; a 15-year term at a typical
lower rate costs a fraction of that.
Interest rate. The price of borrowing, set by markets, your credit score, down payment,
and loan type. A single percentage point matters enormously: on $320,000 over 30 years, the difference
between 6% and 7% is roughly $210 per month and about $76,000 over the loan’s life.
The full cost of owning a home
The mortgage payment is only part of the picture. Recurring costs continue for as long as
you own the home: property taxes (about 1.1% of home value per year on average in the U.S., varying widely
by state), homeowners insurance, HOA dues for condos and many newer developments, and maintenance —
budget roughly 1% of the home’s value per year. These costs also tend to rise with inflation, which is
why the calculator lets you model annual increases.
One-time costs hit at purchase: closing costs (typically 2–5% of the loan, covering
appraisal, title, origination and recording fees), moving expenses, and any immediate repairs or renovations.
They are not part of the monthly calculation, but smart buyers budget for them on top of the down payment.
Should you make extra payments?
Because interest is charged on the remaining balance, extra principal payments early in the loan are
disproportionately powerful. Three common strategies: add a fixed amount every month, switch to biweekly
payments (26 half-payments a year equals one extra monthly payment annually), or make occasional lump-sum
payments from bonuses or tax refunds. On the default example above, $200 extra per month pays the loan off
about 7 years early and saves over $125,000 in interest.
Extra payments are not always the best move, though. Check for prepayment penalties (rare on modern
conventional loans, but verify), keep an emergency fund first, and weigh the opportunity cost: paying off
a 4% mortgage while investments might return more is a genuine trade-off. Paying down high-interest debt
like credit cards almost always beats extra mortgage payments.
15-year vs 30-year mortgage
The 30-year mortgage wins on flexibility: lower payments leave room for investing, emergencies, and life.
The 15-year wins on cost: lower rates plus half the time means you often pay less than a third of the
interest. A popular middle path is taking the 30-year loan and voluntarily paying it like a 15-year when
cash flow allows — you keep the safety of the lower required payment while capturing most of the
interest savings. Use the term field above to compare both scenarios with your own numbers.
Mortgage Calculator FAQ
What is a mortgage calculator?
A mortgage calculator is a tool that estimates your monthly home loan payments, total interest paid, and payoff date based on the home price, down payment, rate, and term.
Do extra payments really save money?
Yes. Extra payments go directly toward principal, which reduces the balance that interest is charged on. Even $100 extra per month on a 30-year loan can shave years off the term and save a large amount of interest — try it above to see your exact savings.
What is PMI and when do I pay it?
Private mortgage insurance (PMI) protects the lender if you default. Lenders usually require it when your down payment is less than 20% of the home price, and it is typically removed once your loan balance drops below 80% of the home’s value.
What is an amortization schedule?
An amortization schedule is a month-by-month table showing how each payment splits between interest and principal, and how your balance declines over time. Early payments are mostly interest; over the years the balance shifts until most of each payment reduces principal.
Disclaimer: This calculator provides estimates for educational purposes only and does not constitute financial,
tax, or legal advice. Actual mortgage payments, rates, taxes, and insurance costs vary by lender, location,
and credit profile. Consult a licensed mortgage professional for figures specific to your situation.