Calculate Your Mortgage Payment with Confidence
A mortgage is the biggest financial commitment most Americans ever make. This calculator shows your exact monthly payment - principal, interest, taxes, insurance, and PMI - based on the loan amount, interest rate, and term. Compare 15-year vs 30-year, fixed vs adjustable, and see how extra payments change your total cost.
What This Mortgage Calculator Does
Enter your home price, down payment, interest rate, and loan term. The calculator returns your monthly principal and interest payment, plus your total monthly cost including property tax, homeowners insurance, PMI, and HOA fees when provided. It also shows your total interest paid over the life of the loan - a number that often surprises first-time buyers.
The Mortgage Payment Formula
The core monthly payment uses the standard amortization formula:
- M = monthly principal and interest payment
- P = principal loan amount (home price minus down payment)
- r = monthly interest rate (annual rate divided by 12)
- n = total number of payments (years × 12)
Worked Example: $350,000 Home, 20% Down
- Home price: $350,000
- Down payment (20%): $70,000
- Loan amount: $280,000
- Interest rate: 6.5% annual (0.5417% monthly)
- Term: 30 years (360 payments)
- Monthly principal and interest: $1,770
- Total interest paid: $357,000
- Total cost of the loan: $637,000
Add property tax (~$300/mo), homeowners insurance (~$120/mo), and you are looking at roughly $2,200 per month.
15-Year vs 30-Year Mortgage Comparison
| Term | Monthly Payment | Total Interest | Total Cost |
|---|---|---|---|
| 15-year @ 6.0% | $2,362 | $145,000 | $425,000 |
| 30-year @ 6.5% | $1,770 | $357,000 | $637,000 |
| Difference | $592/mo more | $212,000 saved |
The 15-year mortgage saves over $200,000 in interest but requires higher monthly payments. A middle ground: get a 30-year and pay extra each month.
What Goes Into Your Monthly Mortgage Payment
Your full monthly housing cost - often called PITI - has four parts:
- Principal: The portion that reduces your loan balance
- Interest: The lender’s fee for borrowing money
- Taxes: Property tax, usually collected in escrow
- Insurance: Homeowners insurance (and flood insurance if required)
If your down payment is under 20%, add PMI (Private Mortgage Insurance) until you reach 20% equity.
How to Use This Calculator
- Enter the home price you are considering.
- Enter your down payment amount or percentage (20% avoids PMI).
- Enter the interest rate your lender quoted.
- Choose your loan term (15, 20, or 30 years).
- Optionally add annual property tax, insurance, and HOA fees.
- Review monthly payment, total interest, and total cost.
- Adjust the down payment or term to see how the numbers change.
How to Lower Your Monthly Payment
- Increase your down payment - 20% eliminates PMI and lowers the loan amount
- Shop multiple lenders - rates vary by 0.5% or more for the same borrower
- Improve your credit score - 740+ earns the best rates
- Choose a longer term - lowers monthly but increases total interest
- Buy mortgage points - pay upfront to lower the rate permanently
- Consider an adjustable-rate mortgage (ARM) if you plan to move within 5-7 years
Understanding Amortization
Early mortgage payments are mostly interest. In the first year of a 30-year loan, roughly 75% of each payment goes to interest. By year 15, that flips. This is why extra principal payments early on save so much money over the life of the loan.
Making one extra payment per year shortens a 30-year mortgage to about 25 years and saves tens of thousands in interest.
Frequently Asked Questions
How much house can I afford?
A common rule: your total housing payment (PITI) should not exceed 28% of gross monthly income, and total debt payments should stay under 36%. On a $100,000 salary, that means keeping your mortgage under $2,300/month.
What credit score do I need for a mortgage?
Conventional loans typically require 620+. FHA loans allow 580 with 3.5% down. VA and USDA loans have more flexible credit requirements. Best rates go to borrowers with 740+.
How much should I put down?
20% avoids PMI and lowers your monthly payment. But 10% or even 5% is common, especially for first-time buyers. FHA loans allow 3.5% down. VA loans can be 0% down.
Is a 15-year or 30-year mortgage better?
15-year saves enormous interest but locks in higher payments. 30-year offers flexibility. If you can afford the 15-year payment, take it. Otherwise, get a 30-year and pay extra.
What is PMI and when does it go away?
PMI (Private Mortgage Insurance) protects the lender if you default. It usually costs 0.3%-1.5% of the loan annually. By law, you can request PMI removal when your loan-to-value ratio reaches 80%.
Should I pay points to lower my rate?
One point costs 1% of the loan and typically lowers your rate by 0.25%. If you plan to stay in the home past the break-even point (usually 5-7 years), points are worth it.
Can I pay off my mortgage early?
Yes. Most mortgages have no prepayment penalty. Extra principal payments reduce the balance and interest immediately. Even $100 extra per month saves thousands over 30 years.