Mortgage Calculator
Calculate your monthly mortgage payment, total interest, and full amortization schedule for any home price, down payment, rate, and term. Private & in-browser — nothing leaves your device.
Show amortization schedule
| Year | Annual Payment | Principal | Interest | Balance |
|---|
Annual totals. Small rounding differences (<$1) may appear; totals match.
Show month-by-month detail
| Month | Payment | Principal | Interest | Balance |
|---|
How is the monthly mortgage payment calculated?
Mortgages use the reducing-balance (amortization) formula:
- P — Loan amount (Home Price − Down Payment)
- r — Monthly interest rate = Annual Rate ÷ 12 ÷ 100
- n — Number of monthly payments = Term in Years × 12
Worked example: $400,000 home, $80,000 down (20%), 7.0% annual rate, 30 years.
Loan P = $320,000 • r = 7.0 ÷ 12 ÷ 100 = 0.005833 • n = 360
(1 + 0.005833)360 ≈ 8.1165
Monthly Payment = 320,000 × 0.005833 × 8.1165 ÷ (8.1165 − 1) ≈ $2,129/mo
Total paid = $2,129 × 360 = $766,440 • Total interest = $766,440 − $320,000 = $446,440
Each payment is the same dollar amount every month, but the split between interest and principal changes: early payments are mostly interest; later payments are mostly principal. This is why extra payments made early in the loan save the most interest.
Monthly payment on a $300,000 loan — rate & term comparison
Values are principal & interest only. Click any cell to load those parameters into the calculator.
| Rate | 15 years | 20 years | 30 years |
|---|
Property taxes, insurance, and PMI are not included. Actual payment will be higher.
PITI: the four parts of a real mortgage payment
The figure this calculator produces is the principal and interest (P&I) — the part that actually repays your loan. But the cheque most homeowners send their lender each month is larger, because it bundles in two more costs under an arrangement lenders call PITI:
- Principal — the part of each payment that reduces the amount you borrowed.
- Interest — the lender's charge for the loan, largest at the start.
- Taxes — property taxes, which vary widely by location and are usually collected monthly and held in escrow.
- Insurance — homeowner's insurance, plus private mortgage insurance (PMI) if your down payment was small.
Taxes and insurance can add hundreds of dollars a month, so when you budget, treat the P&I figure here as a floor, not the whole story. Lenders also apply their affordability rules to the full PITI, not just to principal and interest.
Why your early payments are almost all interest
Every monthly payment is the same dollar amount, but the split between interest and principal shifts dramatically over the life of the loan. Interest is charged on the outstanding balance, which is highest at the beginning, so early payments are mostly interest and barely dent the principal. As the balance falls, the interest share shrinks and more of each payment goes to principal — the curve accelerates toward the end. On the worked $320,000 example at 7% for 30 years, the very first payment is about $1,867 interest and only about $262 principal; near the end those proportions are reversed. This front-loading is why a 30-year loan costs so much in total interest, and why extra payments made early — when they attack a large balance — save far more interest than the same payments made years later.
Fixed-rate vs adjustable-rate (ARM)
This calculator models a fixed-rate mortgage, where the interest rate — and therefore the P&I payment — never changes for the entire term. The 30-year fixed is the most popular home loan in the United States precisely because of that certainty. An adjustable-rate mortgage (ARM) instead starts with a lower fixed "teaser" rate for an introductory period (a 5/1 ARM is fixed for five years, then adjusts annually), after which the rate floats with a market index plus a fixed margin, within caps that limit how much it can rise per adjustment and over the life of the loan. An ARM can save money if you expect to move or refinance before it adjusts, but it carries the risk that your payment jumps when rates rise — a risk the fixed rate modelled here does not have.
PMI: when you pay it, and how to shed it
If your down payment is less than 20%, most conventional lenders require private mortgage insurance (PMI), which protects the lender (not you) if you default. It typically costs somewhere around 0.5% to 1.5% of the loan amount per year, added to your monthly payment. The good news is that PMI is not forever. Under the U.S. Homeowners Protection Act of 1998, on a qualifying loan that is current the lender must automatically cancel PMI once your balance is scheduled to reach 78% of the home's original value, and you have the right to request cancellation once you reach 80%. You can get there faster by making extra principal payments, or — if your home's value has risen — by requesting a new appraisal. Putting 20% down avoids PMI entirely, which is one of the strongest arguments for a larger down payment.
Discount points: paying upfront to lower the rate
Lenders let you "buy down" your interest rate by paying discount points at closing. One point costs 1% of the loan amount and typically lowers the rate by roughly 0.25 percentage points (the exact amount varies by lender). Points only pay off if you keep the loan long enough to recoup the upfront cost through lower monthly payments — the break-even point. If a point costs $3,200 and saves $40 a month, you break even in about 80 months (under seven years); keep the loan longer and points save money, sell or refinance sooner and they cost you. Compare the monthly payment at the higher and lower rate with this calculator, then divide the point cost by the monthly saving to find your break-even.
APR vs the interest rate
When you shop for a mortgage you will see two percentages: the interest rate and the APR (annual percentage rate). The interest rate determines your monthly P&I — it is the number this calculator uses. The APR is broader: it folds in points, origination fees and certain other closing costs to express the loan's total yearly cost as a single rate, which makes it the better number for comparing offers from different lenders. A loan with a low rate but heavy fees can have a higher APR than one with a slightly higher rate and no fees. Compare APR to APR, but use the note rate (the interest rate) to understand your actual monthly payment.
How much house can you afford? The 28/36 rule
Lenders gauge affordability with debt-to-income (DTI) ratios. A long-standing guideline is the 28/36 rule: your total housing payment (PITI) should not exceed about 28% of your gross monthly income (the "front-end" ratio), and all your monthly debt payments combined — housing plus car loans, student loans and credit cards — should not exceed about 36% (the "back-end" ratio). Many loan programs stretch these limits, and the federal "qualified mortgage" standard has generally treated a back-end DTI around 43% as a key threshold, but borrowing to the maximum a lender allows is rarely comfortable to live with. A useful exercise is to pick a monthly payment you are happy with first, then work backwards to a home price using this calculator.
15-year vs 30-year: the real trade-off
A shorter term is not simply "better" — it is a different bargain. A 15-year mortgage usually carries a lower interest rate and, because you repay in half the time, costs dramatically less total interest — often less than half what a 30-year loan costs. The price is a substantially higher monthly payment. A 30-year term keeps the monthly payment low and frees up cash flow, which some borrowers invest elsewhere for a potentially higher return, at the cost of far more interest over time. There is also a middle path: take the 30-year loan for its lower required payment but voluntarily pay extra toward principal in good months — capturing much of the interest saving of a shorter term while keeping the flexibility of a lower obligation. Use the reference table and amortization schedule above to see exactly how the numbers compare for your own figures.
Extra payments and refinancing
Because of front-loaded interest, extra principal payments are remarkably powerful: even one additional payment a year can cut years off a 30-year loan and save tens of thousands in interest, and the earlier you start, the more you save. Always confirm the extra amount is applied to principal, not held as prepaid interest. Refinancing — replacing your loan with a new one at a lower rate — can also save money, but it has closing costs of its own, so the same break-even logic applies: divide the refinance cost by the monthly saving to see how many months it takes to come out ahead, and weigh that against how long you plan to stay. The amortization view is a good way to model "what if I pay it off faster" scenarios before committing.
Escrow accounts: how taxes and insurance are paid
Most lenders collect property taxes and homeowner's insurance along with your monthly payment and hold them in an escrow (or impound) account, paying the tax authority and the insurer on your behalf when the bills come due. This spreads two large annual costs into manageable monthly amounts and protects the lender by ensuring the taxes and insurance on their collateral are always paid. The catch is that your total payment can change from year to year even on a fixed-rate loan: if property taxes rise or your insurance premium increases, the lender recalculates ("re-escrows") and your monthly payment goes up, even though the principal-and-interest portion this calculator shows stays fixed.
The down payment does more than avoid PMI
A larger down payment helps in several ways at once. It shrinks the loan, which lowers both the monthly payment and the total interest; it removes PMI once you reach 20%; it often earns a slightly better interest rate, because the lender is taking less risk; and it gives you immediate equity, a cushion if home values dip. But it is not a clear-cut "more is always better" decision. Tying up cash in a down payment means it is not available for an emergency fund, higher-return investments, or simply the costs of moving in. Many buyers put down just enough to clear the 20% PMI threshold and keep the rest liquid. Use this calculator to see exactly how each extra dollar of down payment changes the monthly figure and the lifetime interest.
Pre-qualification vs pre-approval
Before house-hunting, lenders offer two kinds of early assessment, and the difference matters. A pre-qualification is a quick, informal estimate based on figures you state about your income and debts — useful for setting a rough budget, but not verified. A pre-approval is a stronger commitment: the lender actually checks your credit and documentation and issues a conditional offer to lend up to a specific amount, which sellers take far more seriously. Whichever you have, the figure a lender quotes is a maximum, not a recommendation. Deciding the monthly payment you are comfortable living with — then working back to a price with this calculator — is the healthier way to set your real budget.
Frequently asked questions
How is a monthly mortgage payment calculated?
A mortgage uses the reducing-balance formula: Monthly Payment = P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1), where P is the loan amount (home price minus down payment), r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly payments (term in years × 12). This gives a fixed payment that covers both interest and principal each month, with the interest portion shrinking and the principal portion growing over time.
What is the monthly payment on a $300,000 mortgage at 7% for 30 years?
For a $300,000 loan at 7% annual interest for 30 years (360 payments): monthly rate r = 7/12/100 = 0.005833. Monthly payment ≈ $1,996. Total paid over 30 years ≈ $718,560. Total interest ≈ $418,560. You can verify this with the calculator above or click any cell in the reference table.
Does a larger down payment lower my monthly payment?
Yes. A larger down payment reduces the loan principal, which directly lowers your monthly payment and the total interest you pay. Additionally, a down payment of 20% or more typically eliminates Private Mortgage Insurance (PMI), saving 0.5–1.5% of the loan amount per year. This calculator shows the down payment, principal, and interest proportions in the breakdown bar.
What is the difference between a 15-year and 30-year mortgage?
A 15-year mortgage has a higher monthly payment but dramatically lower total interest. For example, on a $300,000 loan at 7%: the 30-year term costs approximately $419K in interest; the 15-year term costs only about $186K in interest — saving $233K — but the monthly payment is about $580 higher. Use the reference table below to compare across rates and terms.
Does this calculator include property taxes and insurance (PITI)?
This calculator computes the principal and interest (P&I) portion of your mortgage payment — the part that goes to your lender. It does not include property taxes, homeowner's insurance, or PMI, which vary by location and loan. Your total monthly housing cost (PITI) will be higher than the figure shown here.
What is an amortization schedule?
An amortization schedule shows how each monthly payment is split between interest and principal over the life of the loan. In early payments, most of the money goes toward interest. Over time, as the principal balance decreases, more of each payment reduces the loan. The full year-by-year and month-by-month breakdown is available in the "Show amortization schedule" section below the calculator.