Mortgage Calculator

The Mortgage Calculator helps estimate your monthly mortgage payment along with other financial costs associated with homeownership. Enter your loan details to calculate the monthly payment and see how factors like interest rate and loan term affect the total cost of your mortgage.

Use this calculator to help with budgeting for a new home purchase or to explore refinancing options for an existing mortgage.

Loan Amount

Interest Rate (%)

Loan Term (Years): 30

Learn More About Mortgages

A mortgage is a loan secured by property, usually real estate. When you take out a mortgage, the lender helps you pay for the property, and you agree to repay the borrowed money over a specific period, typically 15 or 30 years in the United States.

Each mortgage payment consists of several components:

Principal: The original amount borrowed
Interest: The cost paid to the lender for borrowing the money
Property taxes: Often collected monthly in an escrow account
Homeowners insurance: Typically required by lenders and also collected in escrow

In the U.S., the most common mortgage is the conventional 30-year fixed-interest loan, representing 70% to 90% of all mortgages.

Understanding the key components of a mortgage helps you make informed decisions:

Loan Amount

The amount borrowed from a lender, typically the purchase price minus your down payment. The maximum loan amount you can borrow usually correlates with your income and other financial factors.

Down Payment

The upfront portion of the purchase price that you pay. Lenders typically prefer a down payment of 20% or more. With less than 20% down, you'll usually need private mortgage insurance (PMI).

Loan Term

The period over which you'll repay the loan, commonly 15, 20, or 30 years. Shorter terms typically have lower interest rates but higher monthly payments.

Interest Rate

The percentage charged by the lender for borrowing the money. Mortgages can have fixed rates (unchanging for the entire term) or adjustable rates (which change periodically based on market conditions).

Monthly mortgage payments are calculated using an amortization formula that ensures the loan is paid off completely by the end of the term. Here's the formula used:

M = P [ r(1 + r)^n ] / [ (1 + r)^n - 1]

Where:

M = Monthly payment
P = Principal (loan amount)
r = Monthly interest rate (annual rate divided by 12 and expressed as a decimal)
n = Total number of payments (loan term in years × 12)

In the early years of your mortgage, a larger portion of each payment goes toward interest rather than principal. As you progress through the loan term, more of each payment goes toward reducing the principal.

Make extra payments when possible. Even small additional amounts applied to the principal can significantly reduce your total interest paid and shorten your loan term.
Consider bi-weekly payments. Making half your mortgage payment every two weeks results in 26 half-payments per year (equivalent to 13 monthly payments instead of 12), which can save you thousands in interest.
Refinance when it makes sense. If interest rates drop significantly or your credit improves, refinancing could lower your monthly payment or reduce your total interest costs.
Understand the impact of points and fees. Sometimes paying points upfront to lower your interest rate makes financial sense, especially if you plan to stay in the home for many years.
Avoid private mortgage insurance if possible. Saving for a 20% down payment or using certain loan programs can help you avoid this additional cost.

Fixed-Rate Mortgages

The interest rate remains constant for the entire loan term. This provides payment stability but typically starts with a higher rate than adjustable options.

Adjustable-Rate Mortgages (ARMs)

The interest rate is fixed for an initial period (commonly 3, 5, 7, or 10 years), then adjusts periodically based on market indexes. ARMs usually start with lower rates but involve more risk as payments can increase over time.

FHA Loans

Insured by the Federal Housing Administration, these loans have more flexible qualification requirements and lower down payment options (as low as 3.5%), making them popular with first-time buyers.

VA Loans

Guaranteed by the Department of Veterans Affairs, these loans are available to service members, veterans, and eligible surviving spouses. They often require no down payment or mortgage insurance.

USDA Loans

Backed by the U.S. Department of Agriculture, these loans are designed for rural property buyers with moderate to low incomes and may require no down payment.

Jumbo Loans

These exceed the conforming loan limits set by Fannie Mae and Freddie Mac and are designed for higher-priced properties. They typically require larger down payments and excellent credit.

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Frequently Asked Questions

How is a monthly mortgage payment calculated?

The principal-and-interest portion uses the amortization formula M = 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. Your full payment usually also includes property taxes, homeowners insurance, and possibly PMI or HOA fees.

How much difference does the interest rate make?

A lot. On a $300,000 30-year loan, the principal-and-interest payment is about $1,896/month at 6.5% versus about $1,996/month at 7% — roughly $100/month and $36,000 more interest over the life of the loan for that half-point difference.

Should I choose a 15-year or 30-year mortgage?

A 15-year mortgage has higher monthly payments but a lower rate and far less total interest — often less than half the interest of a 30-year loan. A 30-year mortgage keeps payments affordable and flexible; you can always pay extra toward principal to shorten it. Run both terms in the calculator to compare.

What is PMI and when can I remove it?

Private mortgage insurance (PMI) is typically required on conventional loans when your down payment is under 20%. It usually costs 0.3%–1.5% of the loan amount per year. You can request removal once you reach 20% equity, and lenders must cancel it automatically at 22% equity on the original amortization schedule.

How much house can I afford?

A common guideline is to keep total housing costs at or below 28% of gross monthly income, and total debt payments below 36%. Lenders often allow more, but staying near these ratios leaves room for savings and surprises. Try our House Affordability Calculator for a personalized estimate.