Mortgage Calculator
Calculate your monthly mortgage payment including principal, interest, property tax, and insurance. See total interest paid and use our guide to understand exactly what your results mean.
Monthly Payment Breakdown
How Mortgage Payments Are Calculated
A mortgage payment is made up of four components, commonly abbreviated as PITI: Principal (repaying the loan balance), Interest (the lender's fee for lending you money), Taxes (property taxes collected monthly and paid annually), and Insurance (homeowners insurance). This calculator covers all four.
The principal and interest portion is calculated using the standard mortgage amortization formula:
Where M = monthly payment, P = loan principal (home price minus down payment), r = monthly interest rate (annual rate ÷ 12), and n = total number of monthly payments (years × 12).
Worked Example
Say you're buying a $350,000 home with a $70,000 down payment (20%), a 6.5% interest rate, and a 30-year term. Your loan amount is $280,000.
- Monthly rate: 6.5% ÷ 12 = 0.5417%
- Total payments: 30 × 12 = 360
- Monthly principal & interest: $1,770
- Property tax ($4,200/yr): $350/month
- Insurance ($1,200/yr): $100/month
- Total monthly payment: $2,220
- Total interest over 30 years: $357,200
That last number is striking — you pay more in interest than the original loan. This is why extra payments and shopping for the best rate matter enormously.
15-Year vs. 30-Year Mortgage: The Real Numbers
On the same $280,000 loan at 6.5%, here's the concrete trade-off between term lengths:
| 15-Year | 30-Year | |
|---|---|---|
| Monthly Payment (P&I) | $2,441 | $1,770 |
| Total Interest Paid | $159,400 | $357,200 |
| Interest Saved | $197,800 | |
The 30-year costs $671 less per month but $197,800 more in total. If you can comfortably afford the 15-year payment, the long-run savings are substantial. Most buyers choose 30-year for the flexibility and lower monthly obligation.
The 28% Rule — How Much House Can You Afford?
A widely-used guideline in personal finance is that your total housing costs (PITI) should not exceed 28% of your gross monthly income. A stricter version says all debt payments combined (housing + car + student loans) should stay under 36%.
Example: If your household earns $8,000/month gross, your maximum housing payment by this rule is $8,000 × 0.28 = $2,240/month. Use the calculator above to find a home price and term combination that hits that target.
What This Calculator Does Not Include
This calculator covers principal, interest, property tax, and homeowners insurance. It does not include:
- PMI (Private Mortgage Insurance): Required when your down payment is less than 20%. Typically adds $50–$200+ per month depending on loan size and credit score.
- HOA fees: Homeowners Association fees can range from $100 to $1,000+ per month in some communities.
- Closing costs: Typically 2–5% of the purchase price, paid upfront.
- Maintenance and repairs: Budget 1–2% of the home's value annually for upkeep.
For a complete picture of homeownership costs, add these items to your monthly total.
Tips for Getting the Best Mortgage
- Shop at least 3 lenders. Even a 0.25% rate difference on a $300,000 loan saves ~$15,000 over 30 years.
- Improve your credit score first. A score above 740 typically qualifies for the best rates.
- Make extra principal payments. An extra $200/month on a 30-year mortgage can cut 5+ years off the loan.
- Consider points. Paying 1% of the loan upfront ("one point") typically reduces your rate by 0.25%. Calculate the break-even time before doing this.
- Lock your rate. Once you find a good rate, ask for a rate lock (usually 30–60 days) to protect yourself from increases before closing.
Frequently Asked Questions
A widely-used guideline is that your total housing costs (principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income. For example, a household earning $7,500/month gross should aim for a housing payment no higher than $2,100/month. Use the calculator to find a home price that fits this target.
A 15-year mortgage has higher monthly payments but significantly lower total interest — often saving $150,000 to $200,000 over the life of the loan compared to a 30-year. A 30-year mortgage has lower monthly payments but you pay roughly twice as much in total interest. Most buyers choose 30-year for affordability flexibility.
A 20% down payment is the traditional benchmark because it eliminates the need for Private Mortgage Insurance (PMI). However, many loan programs allow 3%–10% down. A larger down payment reduces your monthly payment, total interest, and loan-to-value ratio.
No. PMI is required when your down payment is less than 20% of the home price. It typically costs 0.5%–1.5% of the loan amount annually, or roughly $50–$200 per month on a $200,000 loan. Add this to your total if your down payment is under 20%.
An amortization schedule shows how each mortgage payment is split between principal and interest over the life of the loan. In the early years, most of your payment goes toward interest. Over time, more goes toward principal. This is why extra early payments have such a large impact on the total interest paid.
Yes, and it can save a significant amount of interest. Making one extra payment per year on a 30-year mortgage can shorten the loan by 4–6 years and save tens of thousands in interest. Always check that your loan has no prepayment penalty before doing this.
Rates vary significantly based on the economy, your credit score, loan type, and down payment. Generally, a score above 740 and a 20% down payment will qualify for near the best available rates. Check with multiple lenders — even a 0.25% difference on a $300,000 loan saves around $15,000 over 30 years.
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