Mortgage Calculator

A mortgage is usually the largest loan a household ever takes, and the monthly payment decides what you can afford long before the interest rate does. This calculator turns four inputs — home price, down payment, interest rate and term — into the numbers that matter: your principal and interest payment, your total monthly cost with taxes and insurance, and the total interest you will hand over across the life of the loan.

The monthly payment is calculated with the standard amortisation formula, the same one lenders use for a fixed-rate mortgage. Each payment covers the interest that accrued that month plus a slice of principal; early in the loan almost everything goes to interest, and the balance shifts gradually toward principal as the loan matures. That is why a 30-year loan costs dramatically more in interest than a 15-year loan at the same rate, even though the payment is much smaller each month.

Use the calculator to compare scenarios rather than to predict a single answer. Try a 15-year term against a 30-year term, then change the rate by half a percentage point and watch the payment move: on a $400,000 loan, half a point is roughly $120 a month. If you are weighing whether to buy now or wait, the payment is the number that determines your budget, while the total interest is the number that determines the real cost.

Remember that a lender's quote includes items this tool estimates only broadly: property taxes based on your county assessment, homeowners insurance, mortgage insurance if your down payment is under 20%, and any HOA dues. Treat the result here as the shape of the deal, then ask a loan officer for a Loan Estimate to see the exact figures for a specific property.

How the math works

Monthly principal and interest = P × r × (1 + r)^n / ((1 + r)^n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12) and n is the number of monthly payments.
The loan amount is the home price minus your down payment; the down payment percentage is the down payment divided by the price.
Total interest is the monthly payment multiplied by the number of payments, minus the original loan amount.
Estimated property tax is the home price × the annual tax rate ÷ 12, and insurance is the annual premium ÷ 12.

Frequently asked questions

How is a monthly mortgage payment calculated?

Lenders use the amortisation formula 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 number of payments. It produces a fixed payment that pays off the loan exactly by the final month, given the same rate throughout.

How much should I put down?

Twenty percent avoids private mortgage insurance on a conventional loan and lowers your payment, but it is not required. Many first-time buyer programs allow 3% to 5% down. A smaller down payment raises the monthly payment and adds PMI, so compare the total cost, not just the entry cost.

Is a 15-year mortgage better than a 30-year?

A 15-year loan almost always costs far less in total interest and builds equity faster, but the monthly payment is roughly 30% to 45% higher. A 30-year loan is more forgiving if your income is variable. Compare both in the calculator above and judge against your budget.

Does this include property taxes and insurance?

It estimates them from the tax rate and annual premium you enter. Your lender collects actual amounts in escrow, which change with your county assessment and your insurer's renewal premium, so confirm them on a Loan Estimate.

What is PMI and do I have to pay it?

Private mortgage insurance protects the lender when your down payment is under 20% of the home price. It typically costs 0.3% to 1.5% of the loan amount per year. You can usually ask to cancel it once you reach 20% equity, in writing and with an appraisal.

Do extra payments help?

Yes. Extra money goes straight to principal, which shortens the term and cuts total interest. Paying one extra payment a year on a 30-year loan typically shortens it by about four to five years. This calculator shows the baseline payment; add your extra payment on top when comparing.

This mortgage calculator is an educational estimate. It does not include closing costs, HOA dues, mortgage insurance specifics, or your lender's actual escrow figures. Request a Loan Estimate from a licensed lender before making a decision.

Calculate

How the math works

Frequently asked questions

Related calculators