Mortgage Calculator

How This Calculator Works

A mortgage calculator turns the four core variables of a home loan — price, down payment, interest rate, and term — into the only two numbers most people actually care about: the monthly payment and the total interest you'll pay over the life of the loan.

The math is a standard amortizing loan formula that's been the industry default since the early 20th century. Given a loan amount P, monthly interest rate r (the annual rate divided by 12), and a total number of payments n (term in years times 12), the fixed monthly principal-and-interest payment M is:

M = P × [ r(1 + r)ⁿ ] / [ (1 + r)ⁿ − 1 ]

Every monthly payment is the same dollar amount, but the split between principal and interest changes every month. Early in the loan, almost all of your payment goes to interest because the balance is still large. By the final year, almost all of it goes to principal. The "amortization schedule" above shows exactly where that crossover happens for your specific loan.

On top of P&I, this calculator adds the four other line items that show up on your monthly mortgage statement: property taxes (annual rate × home value, divided by 12), homeowners insurance (your annual premium ÷ 12), HOA dues, and PMI (private mortgage insurance, which conventional lenders charge when your down payment is under 20% — typically 0.3% to 1.5% of the loan per year). Together these are usually labeled "PITI" (principal, interest, taxes, insurance) and represent your real monthly housing cost.

Understanding Your Results

The result panel shows five numbers worth knowing how to read:

• Monthly P&I — the part of the payment that pays down the loan and pays the lender for the money. This is what mortgage shoppers usually mean when they say "the payment."
• Total monthly — P&I plus tax, insurance, HOA, and PMI. This is the number to use when checking against your household budget. A good rule of thumb is that this should not exceed 28% of your gross monthly income (the "front-end DTI" lenders use).
• Total interest — what you'll pay the lender, in total, across the full term. On a 30-year loan at a typical rate, this often equals or exceeds the loan amount itself. That's not a typo; it's how amortization works.
• Total cost — total interest + the original loan + your down payment. The true sticker price of homeownership before tax deductions.
• Loan amount — price minus down payment. The principal the interest rate applies to.

The first-12-months table is where the "where does my money actually go" question gets answered. On a typical 30-year loan at 7%, the very first payment is often 80%+ interest. By month 12, that ratio has barely moved. By month 120 (year 10), principal and interest are roughly equal. By month 360, almost everything is principal. This is also why making just one extra principal payment per year on a 30-year loan typically shaves four to six years off the term and saves five figures in interest.

The two split-bar charts show the principal/interest mix on your very first and very last regular payments — a quick visual confirmation of how much of your money the lender actually keeps.

Factors That Affect Your Mortgage Payment

Beyond the four inputs above, several real-world variables move your monthly payment and total interest in ways the basic formula doesn't capture:

Credit score and "rate sheet" tiers

Lenders price mortgages in 20-point credit-score tiers. The cleanest pricing is usually reserved for borrowers above 740 FICO. Each tier below 740 — 720, 700, 680, 660 — adds roughly 0.125%–0.375% to your rate. A 740-credit borrower vs a 660-credit borrower on the same loan typically pays 0.75% to 1.25% more, which on a $300,000 30-year mortgage is $45,000+ in extra lifetime interest. If your score is borderline, pulling a free credit report and disputing legitimate errors is usually the highest-leverage hour you'll spend on the entire transaction.

Loan term: 30 vs 20 vs 15 years

The 30-year is the default because it produces the lowest monthly payment. The 15-year typically saves 50%+ of total interest but raises the monthly payment by 30–40%. A common middle-ground strategy is to take a 30-year loan and pay extra principal voluntarily — same low minimum if cash flow tightens, but you can crush the term when you have margin.

Discount points

Buying "points" lets you pay an upfront fee (typically 1% of the loan per point) to reduce your interest rate (typically by 0.25% per point). The math hinges on how long you stay: if you'll be in the loan for less than 5–7 years, points usually don't pay back; longer than that, they often do. Lender quotes will show "0 points," "1 point," and "2 points" side by side — compare break-even months, not just the headline rate.

PMI and the 20%-down rule

Conventional loans below 20% down require Private Mortgage Insurance — a monthly fee paid to a third-party insurer that protects the lender against your default. PMI rates run roughly 0.3% to 1.5% of the loan per year, scaled by your credit and LTV. PMI drops off automatically when your LTV reaches 78% (and can be requested at 80%). FHA loans use a different program called MIP that is often permanent — see our Types of Mortgages guide for the distinction.

Property taxes and where you live

Property tax rates vary by a factor of 7× between the lowest-tax states (Hawaii ~0.32%) and the highest (New Jersey ~2.23%). On a $400,000 home that's the difference between $1,300 and $9,000 per year — over $640 per month. Most lenders escrow these taxes into your monthly payment. See our Property Tax Rates by State guide for the full ranking.

Homeowners insurance

Premiums vary by hazard exposure (coast, hail, wildfire), home age, roof material, and claims history. National average is ~$1,400 a year but ranges from under $700 in mild states to over $5,000 in storm-heavy regions. Bundling with auto insurance and a newer roof are the two largest discount levers.

Market rate movements

Mortgage rates move daily and roughly track the 10-year Treasury yield plus a spread. A 0.5% rate move — common over the course of a 90-day shopping window — changes the monthly P&I on a $400,000 loan by about $120 and total lifetime interest by roughly $45,000. Locking your rate at application and floating only when you have a clear thesis is the safe default.

HOA dues

HOA dues vary from $0 (single-family on a fee-simple lot) to $1,000+ per month for condos with full amenities. They are not financed and are not tax-deductible, so they directly reduce affordability.

Frequently Asked Questions

Next Steps

Once you have a monthly payment you can live with, the next steps are usually one of these — depending on where you are in the buying process:

• Closing Costs Calculator — estimate the cash you'll need at the closing table.
• Rent vs Buy Calculator — confirm that buying actually beats renting in your market and time horizon.
• Property Tax Calculator — get a more precise tax number for your state and home value.
• Types of Mortgages — Conventional, FHA, VA, USDA, jumbo, or ARM — which is right for you.
• Homeowners Insurance Explained — what your policy actually covers and how to lower the premium.