Mortgage Calculator

How to use this calculator

• Enter the total home purchase price.
• Set your down payment as a dollar amount or percentage.
• Input the annual interest rate offered by your lender.
• Choose a loan term of 15, 20, or 30 years and hit Calculate.

How it works

This calculator uses the standard amortization formula: M = P[r(1+r)^n] / [(1+r)^n - 1], where P is the loan principal, r is the monthly interest rate, and n is the total number of payments. The result gives you the fixed monthly payment over the life of the loan.

What Is a Mortgage Calculator?

A mortgage calculator is a financial tool that helps you estimate your monthly home loan payment before you commit to buying a property. It takes your home price, down payment, interest rate, and loan term and runs them through the standard amortization formula to give you a clear picture of what you'll owe each month.

Beyond the monthly payment, a good mortgage calculator also shows you the total interest you'll pay over the life of the loan and the overall cost of the home including financing. This is critical information because the sticker price of a house is only part of the story. On a 30-year mortgage, you can easily pay more in interest than the original loan amount.

Whether you're a first-time homebuyer comparing neighborhoods or a current homeowner thinking about refinancing, running the numbers ahead of time helps you set a realistic budget and avoid surprises at the closing table.

Frequently Asked Questions

How much house can I afford?

A common guideline is to keep your monthly mortgage payment at or below 28% of your gross monthly income. For example, if your household earns $6,000 per month before taxes, you'd want your payment to stay under roughly $1,680. Use this calculator to experiment with different price points until you find a comfortable range.

What is the difference between a 15-year and 30-year mortgage?

A 15-year mortgage has higher monthly payments but a significantly lower total interest cost. A 30-year mortgage spreads payments out, making each one more affordable, but you'll pay much more in interest over the full term. Try both options in the calculator to see the difference in dollars.

Does this calculator include property taxes and insurance?

This calculator focuses on principal and interest only. Your actual monthly payment will likely be higher once you add property taxes, homeowners insurance, and possibly private mortgage insurance (PMI) if your down payment is less than 20%. These vary widely by location and policy.

How does my down payment affect the loan?

A larger down payment reduces the amount you need to borrow, which lowers both your monthly payment and the total interest paid. Putting down at least 20% also typically lets you avoid PMI, saving you even more each month.

What interest rate should I use?

Use the rate your lender has quoted you, or check current average rates online for a general estimate. Even a small difference in rate can have a big impact over 30 years. For example, the difference between 6% and 6.5% on a $300,000 loan adds up to tens of thousands of dollars in extra interest.

Example Calculation

Suppose you're buying a home for $350,000 with a 20% down payment ($70,000), a 6.5% interest rate, and a 30-year term. Here's what the numbers look like:

• Loan amount: $280,000
• Monthly payment: approximately $1,770
• Total interest over 30 years: approximately $357,300
• Total cost (principal + interest): approximately $637,300

That means you'd pay more in interest than the original loan amount. Switching to a 15-year term would raise the monthly payment to about $2,441 but cut total interest to roughly $159,400 — saving you nearly $198,000.

Understanding Mortgage Payments

Your monthly mortgage payment is often referred to as PITI, which stands for Principal, Interest, Taxes, and Insurance. The calculator above covers the first two components — principal and interest — but understanding all four is essential for budgeting accurately.

Principal is the portion of your payment that goes toward paying down the actual loan balance. Interest is what the lender charges you for borrowing the money. Taxes refers to property taxes, which your lender typically collects monthly and holds in an escrow account. Insurance includes homeowners insurance and, if your down payment is under 20%, private mortgage insurance (PMI).

What surprises many first-time buyers is how the split between principal and interest changes over time. In the early years of a mortgage, the vast majority of each payment goes toward interest. As the loan matures, the balance shifts and more of your payment chips away at the principal. This is called amortization.

Here's a concrete example using a $280,000 loan at 6.5% over 30 years (monthly payment of about $1,770):

Notice how in Month 1, roughly 86% of your payment goes to interest. By the halfway point, the split is closer to 60/40. And in the final year, nearly every dollar goes toward paying off principal. This is why making extra payments early in the loan has such a dramatic effect on total interest paid.

15-Year vs 20-Year vs 30-Year Mortgages

Choosing the right loan term is one of the biggest financial decisions you'll make. A shorter term means higher monthly payments but dramatically less interest over the life of the loan. Here's a side-by-side comparison using a $350,000 home with 20% down ($280,000 loan) at a 6.5% interest rate:

The difference is staggering. Choosing a 15-year term over a 30-year term saves you nearly $198,000in interest — but your monthly payment jumps by about $671. The 20-year term offers a middle ground, saving you $136,000 in interest compared to the 30-year option while keeping payments more manageable.

A 30-year mortgage makes sense if you want the lowest monthly payment for cash flow flexibility, you're investing the difference elsewhere, or you're buying near the top of your budget. A 15-year mortgage works well if you have a high income relative to the home price, you're close to retirement and want to be debt-free, or you simply want to build equity faster. The 20-year termis a smart compromise if the 15-year payment feels tight but you don't want to pay 30 years of interest.

How to Get a Lower Mortgage Rate

Even a small reduction in your interest rate can save you tens of thousands of dollars. Here are the most effective ways to secure a lower rate:

Improve your credit score. Lenders reserve their best rates for borrowers with scores above 740. Paying down credit card balances, avoiding new credit inquiries before applying, and correcting any errors on your credit report can all bump your score. A 50-point improvement could shave 0.25% to 0.5% off your rate.

Make a larger down payment. Putting down 20% or more not only eliminates PMI but also signals lower risk to lenders, often resulting in a better rate. If you can stretch to 25% or even 30% down, you may qualify for an even more favorable rate tier.

Shop around aggressively. Rates vary between lenders more than most people realize. Get quotes from at least three to five lenders, including banks, credit unions, and online mortgage companies. Multiple inquiries within a 45-day window count as a single hard pull on your credit report.

Consider paying points.A mortgage point costs 1% of the loan amount and typically lowers your rate by about 0.25%. On a $280,000 loan, one point costs $2,800. If it reduces your rate from 6.5% to 6.25%, you'd save roughly $52 per month — paying for itself in about 54 months.

Evaluate ARM vs. fixed. Adjustable-rate mortgages (ARMs) often start with lower rates than fixed-rate loans. A 5/1 ARM could save you money if you plan to sell or refinance within the first five years. Just make sure you understand the risk of rate increases after the initial fixed period ends.

Hidden Costs of Homeownership

The purchase price and mortgage payment are just the starting point. Several ongoing costs catch new homeowners off guard, so it's important to factor them into your budget from the beginning.

Property taxestypically range from 1% to 2% of your home's assessed value per year. On a $350,000 home, that's $3,500 to $7,000 annually, or roughly $290 to $583 per month added to your housing cost.

Homeowners insurance usually runs $1,200 to $2,500 per year depending on your location, home size, and coverage level. This is required by every mortgage lender.

Private mortgage insurance (PMI)applies when your down payment is less than 20%. It typically costs 0.5% to 1% of the loan amount per year. On a $315,000 loan (10% down on $350,000), that's an extra $131 to $263 per month until you reach 20% equity.

HOA fees are common in condos, townhouses, and planned communities. They can range from $100 to $500 or more per month and typically cover exterior maintenance, amenities, and community insurance.

Maintenance and repairsare the cost most buyers underestimate. The general rule of thumb is to budget 1% of your home's value per year for upkeep. That's $3,500 per year on a $350,000 home for things like HVAC servicing, roof repairs, plumbing fixes, and appliance replacements.

Closing costs at the time of purchase typically run 2% to 5% of the loan amount. On a $280,000 mortgage, expect to pay $5,600 to $14,000 in lender fees, appraisal costs, title insurance, and other charges.

Mortgage Prepayment Strategies

Paying off your mortgage early can save you a massive amount of interest. Here are the most popular prepayment approaches and how they stack up:

Extra monthly payments. Adding even a modest amount to your monthly payment goes directly toward principal, reducing your balance faster and cutting the total interest you owe. For example, adding just $100 per month to a $300,000 mortgage at 6.5% over 30 years saves you roughly $43,000 in interest and pays off the loan about 4 years early.

Biweekly payments.Instead of making 12 monthly payments, you pay half the monthly amount every two weeks. Because there are 52 weeks in a year, this results in 26 half-payments — the equivalent of 13 full payments. That one extra payment per year can shave 4 to 5 years off a 30-year mortgage.

Lump sum payments. Applying a tax refund, bonus, or inheritance directly to your mortgage principal can make a big dent. A one-time $5,000 payment in Year 5 of a $300,000 loan at 6.5% saves you roughly $13,000 in interest over the remaining term.

Refinancing to a shorter term.If rates have dropped since you took out your mortgage, refinancing from a 30-year to a 15-year loan locks in a lower rate and forces faster payoff. Just make sure the closing costs on the new loan don't eat up the savings.

Before prepaying, check that your lender doesn't charge a prepayment penalty. Most conventional loans don't, but it's always worth confirming. Also consider whether the money might earn a higher return invested elsewhere — if your mortgage rate is 3.5% but your investments average 8%, the math may favor investing instead.

Mortgage Glossary

Mortgage paperwork is full of jargon. Here are the key terms you'll encounter during the homebuying process: