Mortgage Calculator
Estimate your monthly payment, see the full amortization, and understand exactly where every dollar goes — in real time, as you type.
Loan details
Updates as you typeAmortization
| Year | Payment | Principal | Interest | Balance | Progress |
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Formula
- M
- Monthly principal & interest payment
- P
- Loan principal (home price − down payment)
- r
- Monthly interest rate (annual APR ÷ 12)
- n
- Total number of payments (years × 12)
Property tax, home insurance, HOA fees, and PMI are added on top as monthly escrow items — they don't change M but are included in your total monthly payment.
Principal vs interest over time
Per-payment splitExamples
How It Works
Your monthly mortgage payment is made up of four parts, often called PITI: Principal (the amount that reduces your loan balance), Interest (what the lender charges for borrowing), Taxes (property taxes collected by your local government), and Insurance (homeowner's insurance that protects against damage or loss).
Several factors determine how much you pay each month. A higher home price or lower down payment means a larger loan and bigger payments. A higher interest rate increases the cost of borrowing, while a shorter loan term raises monthly payments but saves substantially on total interest. Rates also vary by loan type: fixed-rate mortgages lock in the same rate for the entire term, adjustable-rate mortgages (ARMs) start lower but can change over time, and government-backed options like FHA and VA loans offer lower down payments for eligible buyers.
Tips & Best Practices
Frequently Asked Questions
What is a mortgage?
A mortgage is a loan used to purchase real estate, where the property itself serves as collateral. You repay it in monthly installments over a fixed term, typically 15 or 30 years, plus interest.
How is the monthly mortgage payment calculated?
Monthly payment uses the formula M = P[r(1+r)^n]/[(1+r)^n - 1], where P is the principal, r is the monthly interest rate (annual rate / 12), and n is the total number of payments. This gives you a fixed payment that covers both principal and interest.
Should I make a larger down payment?
A larger down payment reduces your loan amount, which lowers monthly payments and total interest. Putting down at least 20% also lets you avoid private mortgage insurance (PMI), saving hundreds per month.
What is PMI and when is it required?
Private Mortgage Insurance protects the lender if you default. It is required when your down payment is less than 20% of the home price. PMI typically costs 0.5–1% of the loan amount annually and can be removed once you reach 20% equity.
What is the difference between fixed and adjustable rate?
A fixed-rate mortgage keeps the same interest rate for the entire loan term, providing predictable payments. An adjustable-rate mortgage (ARM) starts with a lower rate that can change periodically based on market conditions, which means payments can increase over time.
How much house can I afford?
A common guideline is the 28/36 rule: spend no more than 28% of your gross monthly income on housing costs (mortgage, taxes, insurance) and no more than 36% on total debt. For example, if you earn $6,000/month, aim for a total housing payment under $1,680.
What closing costs should I expect?
Closing costs typically range from 2% to 5% of the loan amount. They include lender fees (origination, appraisal, credit report), title insurance, escrow deposits for taxes and insurance, and prepaid interest. On a $300,000 loan, expect $6,000 to $15,000 in closing costs.
How does refinancing work?
Refinancing replaces your current mortgage with a new one, ideally at a lower interest rate. You apply for a new loan, pay closing costs (typically 2–3% of the loan), and use the proceeds to pay off the original mortgage. It makes financial sense when you can lower your rate by at least 0.5–1% and plan to stay in the home long enough to recoup closing costs.
What is an amortization schedule?
An amortization schedule is a table showing every monthly payment over the life of your loan, broken down into principal and interest portions. Early payments are mostly interest, while later payments go primarily toward principal. This schedule helps you understand how your balance decreases over time.
Should I choose a 15-year or 30-year mortgage?
A 15-year mortgage has higher monthly payments but a lower interest rate and dramatically less total interest paid. A 30-year mortgage offers lower monthly payments and more flexibility in your budget. Choose 15 years if you can comfortably afford the payments; choose 30 years if you prefer lower payments or want to invest the difference elsewhere.
How do extra payments affect my mortgage?
Extra payments go directly toward your principal balance, reducing the total interest you pay and shortening your loan term. Even an extra $100 per month on a $240,000 loan at 6.5% can save over $40,000 in interest and pay off your mortgage nearly 5 years early. Most lenders allow extra payments without penalties.
What happens if I miss a mortgage payment?
Missing one payment typically triggers a late fee (usually 3–6% of the payment) after a 15-day grace period. After 30 days, the missed payment is reported to credit bureaus, which can significantly lower your credit score. After 90–120 days of missed payments, the lender may begin foreclosure proceedings. Contact your lender immediately if you anticipate difficulty making a payment — they often offer forbearance or modification options.