Finance

Mortgage Calculator

Calculate your monthly mortgage payment, see your amortization schedule, and discover how extra payments can save you thousands.

Quick Answer

Monthly mortgage payment is calculated using M = P[r(1+r)^n] / [(1+r)^n - 1], where P is loan amount, r is monthly interest rate, and n is total payments. A $400,000 home with 20% down ($320,000 loan) at 6.5% for 30 years costs approximately $2,023/month in principal and interest alone. Adding an extra $200/month can save over $70,000 in interest and shorten the loan by 5+ years.

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$

$80,000 (20.0%)

1%12%
$
$
$

Additional principal payment each month to pay off your loan faster.

Monthly P&I
$2,022.62
Total Monthly
$2,564.28
Total Interest
$408,142
Total Cost
$1,003,142

Monthly Payment Breakdown

Principal & Interest: $2,022.62/mo (79%)
Property Tax: $416.67/mo (16%)
Insurance: $125.00/mo (5%)

Loan Details

Home Price
$400,000
Down Payment (20.0%)
-$80,000
Loan Amount
$320,000
Interest Rate
6.500%
Loan Term
30 years (360 payments)
Principal & Interest
$2,022.62/mo
Property Tax
$416.67/mo
Home Insurance
$125.00/mo
Total Monthly Payment
$2,564.28/mo
Disclaimer: This calculator provides estimates for informational purposes only. Actual mortgage payments may vary based on your credit score, lender terms, property location, and other factors. PMI rates, property taxes, and insurance costs are estimates and will vary by lender and location. This tool does not constitute financial advice. Always consult a qualified mortgage professional for personalized guidance.
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About This Tool

The Mortgage Calculator helps you estimate your monthly mortgage payment and understand the true cost of homeownership. By entering your home price, down payment, loan term, and interest rate, you get an instant breakdown of principal and interest, property taxes, homeowners insurance, and PMI.

Buying a home is the largest financial decision most people make. Understanding how much you'll pay each month and over the life of the loan helps you budget effectively and compare different loan scenarios. This calculator includes a year-by-year amortization schedule so you can see exactly how your balance decreases over time.

How Mortgage Amortization Works

With a fixed-rate mortgage, your monthly payment stays the same, but the split between principal and interest changes over time. In the early years, most of your payment goes toward interest. As the loan matures, more goes toward principal. This is why making extra payments early in the loan saves the most money.

The Power of Extra Payments

Even small extra monthly payments can dramatically reduce your loan term and total interest. The extra payment simulator above shows exactly how much you'll save. Extra payments go directly toward your principal balance, which reduces the interest charged in all future months, creating a compounding savings effect.

How Much House Can I Afford?

The "How Much Can I Afford?" mode uses the industry-standard 28/36 rule to determine your maximum home price. The front-end ratio (28%) limits your housing costs to 28% of gross monthly income. The back-end ratio (36%) limits your total debt obligations to 36% of gross monthly income. The calculator uses whichever limit is more restrictive to give you a conservative, lender-friendly estimate.

Trying to figure out your budget before you start shopping? Read our complete guide: How Much House Can I Afford?

Frequently Asked Questions

How is a monthly mortgage payment calculated?
The monthly principal and interest payment 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, and n is the total number of payments. Property taxes, insurance, and PMI are added on top of this base payment.
What is PMI and when is it required?
PMI (Private Mortgage Insurance) is typically required when your down payment is less than 20% of the home price. It protects the lender if you default. PMI usually costs 0.5%-1% of the loan amount annually and can be removed once you reach 20% equity.
How much does an extra monthly payment save?
Extra payments go directly toward principal, reducing your loan balance faster and saving on interest. For example, adding $200/month to a $320,000 30-year mortgage at 6.5% could save over $75,000 in interest and pay off the loan about 6 years early.
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. Choose based on your monthly budget, financial goals, and comfort level with the payment amount.
What costs are not included in the monthly mortgage payment?
Your mortgage payment typically covers principal, interest, property taxes, and insurance (PITI). It does not include utilities, HOA fees, maintenance costs, closing costs, or major repairs. Budget an additional 1-2% of your home's value annually for maintenance.
What is the 28/36 rule for mortgage affordability?
The 28/36 rule is a guideline lenders use. Your total housing costs (mortgage, taxes, insurance) should not exceed 28% of your gross monthly income (front-end ratio), and your total debt payments (housing + car loans, student loans, credit cards) should not exceed 36% of gross monthly income (back-end ratio). The 'How Much Can I Afford?' calculator uses the more restrictive of these two limits.

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