How to use this mortgage calculator
Enter the home price, your down payment as a percentage, the interest rate you’ve been quoted, and the loan term. The calculator instantly shows your estimated total monthly payment, broken down into principal and interest, property tax, home insurance, and — if your down payment is under 20% — an estimate for private mortgage insurance. Add an extra monthly payment to see how much faster you’d pay the loan off and how much interest you’d save.
Click Show amortization schedule to see, year by year, how much of your money goes to interest versus principal and what your remaining balance will be.
The formula behind the numbers
Lenders use a fixed-payment amortization formula so that the same monthly amount pays off the entire balance by the end of the term:
M = P × [ r(1 + r)^n ] ÷ [ (1 + r)^n − 1 ]- P — loan principal (home price minus down payment)
- r — monthly interest rate (annual rate ÷ 12)
- n — total number of payments (years × 12)
Early in the loan most of each payment is interest, because interest is charged on the whole outstanding balance. As the balance falls, a larger share of each payment goes to principal. That’s why extra payments made early have an outsized effect.
Worked example
Suppose you’re buying a $400,000 home with 20% down ($80,000), financing $320,000 at 6.5% for 30 years.
| Item | Monthly |
|---|---|
| Principal & interest | $2,022.62 |
| Property tax ($4,800/yr) | $400.00 |
| Home insurance ($1,500/yr) | $125.00 |
| Total | $2,547.62 |
Over 30 years you’d pay about $408,000 in interest — more than the amount borrowed. Adding $200 a month would pay the loan off in about 23½ years and save roughly $105,000.
What’s not included
The calculator covers the big recurring costs, but your actual payment may also include mortgage points, an escrow cushion, flood insurance, or mortgage insurance premiums on FHA loans (which work differently from conventional PMI). Closing costs — typically 2–5% of the price — are paid up front rather than monthly. Property tax and insurance also change over time, so revisit the numbers yearly.
Tips for a lower payment
- Shop rates. A quarter-point difference on a $320,000 loan is about $50 a month, or $18,000 over 30 years.
- Reach 20% down if you can — it removes PMI and usually earns a better rate.
- Consider a shorter term if the payment fits; 15-year rates are typically 0.5–0.75% lower.
- Make one extra payment a year (or pay bi-weekly). It shaves years off a 30-year loan.
Frequently asked questions
How is the monthly mortgage payment calculated?
The principal-and-interest part uses the standard amortization formula M = P × r ÷ (1 − (1 + r)^−n), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12) and n is the number of monthly payments. Taxes, insurance, PMI and HOA are added on top.
What is PMI and when do I have to pay it?
Private mortgage insurance protects the lender if you default. Most conventional lenders require it when your down payment is under 20%. It typically costs 0.3%–1.5% of the loan per year and can be removed once you reach 20% equity.
Do extra payments really make a difference?
Yes. Because every extra dollar goes straight to principal, it stops accruing interest for the rest of the loan. On a $320,000 30-year loan at 6.5%, an extra $200 a month cuts about six and a half years off the term and saves roughly $105,000 in interest.
Should I choose a 15-year or 30-year mortgage?
A 15-year loan has a higher monthly payment but a lower rate and dramatically less total interest. A 30-year loan is easier on monthly cash flow. Use the calculator to compare both — many people take the 30-year and pay extra when they can, which keeps flexibility.
Last updated August 26, 2026.