Mortgage Calculator
Estimate your monthly principal-and-interest payment. Enter the home price, down payment, annual interest rate and loan term for instant results, including total interest and payoff date.
Quick Examples
What Is a Mortgage Calculator?
A mortgage calculator estimates the monthly payment on a fixed-rate home loan from four inputs: the home price, the down payment, the annual interest rate, and the loan term in years. It computes the fixed monthly amount that covers both the loan principal (the amount borrowed) and the interest (the lender's charge for the loan) so that the balance reaches exactly zero at the end of the term.
Buyers use it to test affordability before making an offer; homeowners use it to compare refinance offers or to see what a larger down payment or a shorter term would save.
How to Use the Mortgage Calculator
- Enter the home price. This is the purchase price of the property, or its current market value if you are refinancing.
- Enter the down payment. The cash you pay upfront. The calculator subtracts it from the home price to find the loan amount.
- Enter the annual interest rate. The fixed rate as a percentage, such as 6.5. The calculator converts it to a monthly rate internally.
- Enter the loan term in years. Common terms are 30, 20, 15, or 10 years. Click Calculate.
The tool shows your monthly principal-and-interest payment, loan amount, total interest, total of all payments, and payoff date.
The Mortgage Payment Formula
Fixed-rate mortgage payments are computed with the standard amortizing-loan formula:
| Symbol | Meaning | How to find it |
|---|---|---|
| M | Monthly payment | What the formula solves for |
| P | Loan principal | Home price minus down payment |
| r | Monthly interest rate | Annual rate ÷ 12 (as a decimal) |
| n | Number of payments | Loan term in years × 12 |
Each month the lender takes the interest owed on the remaining balance first, and the rest reduces the principal. The payment stays constant, but its composition shifts from interest toward principal over time.
Worked Example
A $400,000 home, 20% down ($80,000), loan principal $320,000, fixed rate 6.5%, term 30 years:
- Monthly rate r = 6.5% ÷ 12 = 0.0054167
- Number of payments n = 30 × 12 = 360
- M = 320,000 × 0.0054167 × (1.0054167)360 / ((1.0054167)360 − 1) = $2,022.62 per month
- Total of all payments = $2,022.62 × 360 = $728,142.36
- Total interest = $728,142.36 − $320,000 = $408,142.36
Total interest ($408,142.36) exceeds the amount borrowed ($320,000) — a normal outcome on a 30-year loan, and exactly why comparing terms matters.
What Determines Your Monthly Payment
Home price and down payment
The loan amount (price minus down payment) is the base everything scales from. Every extra dollar of down payment is a dollar that never accrues interest, lowering both the payment and lifetime interest.
Interest rate
Small rate differences compound enormously over hundreds of payments: on a $320,000 30-year loan, 6.5% costs $2,022.62 per month while 7.5% costs $2,237.49 — a $214.87 monthly and $77,353 lifetime difference.
Loan term
A longer term lowers the monthly payment but stretches interest over more years; a shorter term raises the payment but slashes lifetime interest, as the comparison table below shows.
Down Payments, LTV and PMI
The loan-to-value ratio (LTV) is the loan amount divided by the home price. On conventional loans, an LTV above 80% (less than 20% down) typically requires private mortgage insurance (PMI), a monthly premium protecting the lender, added to your payment until you reach 20% equity.
A 20% down payment avoids PMI entirely. Smaller down payments are common, but the PMI premium plus the larger loan balance both push the effective monthly cost up.
15-Year vs 30-Year Mortgage Comparison
The same $300,000 loan at 6% behaves very differently across the two most popular terms:
| 30-Year Term | 15-Year Term | |
|---|---|---|
| Monthly payment | $1,798.65 | $2,531.57 |
| Total interest | $347,514.57 | $155,682.69 |
| Total of all payments | $647,514.57 | $455,682.69 |
| Interest saved vs 30-year | — | $191,831.88 |
The 15-year mortgage costs about 40% more per month but saves nearly $192,000 in interest and builds equity far faster. Choose the 30-year term for lower required payments; choose the 15-year term to minimize total cost if the higher payment fits your budget.
What Your Monthly Payment Does Not Include
This calculator estimates principal and interest only. A real housing payment usually adds:
- Property taxes: assessed annually; lenders typically collect one-twelfth per month through an escrow account.
- Homeowners insurance: usually escrowed monthly at one-twelfth of the annual premium.
- PMI or mortgage insurance: required when the down payment is below 20% on a conventional loan.
- HOA dues: monthly community fees, billed separately from the mortgage.
Taxes, insurance, and dues can add several hundred dollars per month beyond the principal-and-interest figure.
Common Mortgage Mistakes to Avoid
- Mistake 1: Budgeting on principal and interest alone. Taxes, insurance, PMI, and HOA dues are real monthly costs — underestimating the total payment is the most common homebuyer error.
- Mistake 2: Ignoring the rate while chasing the price. A 1 percentage point rate change moves a $320,000 30-year payment by about $200 per month — often more than a $25,000 price difference.
- Mistake 3: Refinancing late without doing the math. Refinancing restarts the schedule at month one, when payments are interest-heavy; late in a loan, the reset can cost more than the lower rate saves.
- Mistake 4: Paying only the minimum on a long loan. Even small extra principal payments early on compound into large interest savings — model them with the loan amortization calculator.
Key Mortgage Terms
- Principal: the amount borrowed, reduced by the principal portion of each payment.
- Interest: the lender's charge, computed monthly on the outstanding balance.
- Down payment: cash paid upfront; price minus down payment equals the loan amount.
- Loan term: the years scheduled to repay the loan in full.
- Amortization: paying a loan off through regular principal-and-interest payments.
- LTV (loan-to-value): loan amount as a percentage of the home's value.
- PMI: private mortgage insurance, usually required below 20% down.
- Escrow: an account the lender uses to collect and pay taxes and insurance.
- Equity: the home's value minus the remaining loan balance.
- Fixed rate: an interest rate constant for the entire loan term.
Frequently Asked Questions
Conclusion
A mortgage calculator turns four numbers — home price, down payment, interest rate, and loan term — into the monthly payment, total interest, and payoff date that define your home loan. The formula keeps payments constant while shifting them from interest toward principal; shorter terms cost far less in interest; and principal-and-interest is only part of the real monthly cost once taxes, insurance, and possible PMI are added.
Use the mortgage calculator above to test scenarios before you buy or to compare refinance offers. For a month-by-month view of where each payment goes, continue to the loan amortization calculator.