Mortgage Calculator

A mortgage calculator estimates the monthly principal-and-interest payment on a home loan, plus total interest over the life of the loan and a full amortization schedule. Enter your loan amount, interest rate, and term, the calculator updates instantly as you type.

The "extra monthly payment" field shows the most under-appreciated lever in personal finance: even $100 per month extra on a 30-year mortgage typically cuts the loan by 4–5 years and saves tens of thousands in interest.

What's actually in a mortgage payment

The number this calculator returns is principal and interest (P&I), the payment that goes directly to your loan balance. Lenders almost always also collect taxes, insurance, and PMI through an escrow account on top of P&I, bundled into a single monthly bill called PITI (Principal, Interest, Taxes, Insurance). On a typical home, PITI is 25–40% larger than P&I:

• Property taxes vary wildly by jurisdiction, from under 0.5% of home value in Hawaii or Alabama to over 2% in New Jersey or Illinois. On a $400,000 home that's $2,000–$8,000 per year, or $170–$670 per month.
• Homeowners insurance typically runs $100–$200 per month for a mid-range home, more in high-risk areas (coastal Florida, wildfire-prone California).
• PMI (Private Mortgage Insurance) is required on conventional loans with less than 20% down. It typically runs 0.3%–1.5% of the loan amount per year, on a $400,000 loan, that's $100–$500 per month, and stays in place until you reach 22% equity (federally mandated auto-cancellation point) or 20% equity (when you can request cancellation).
• HOA fees, where applicable, add anywhere from $50 to over $1,000 per month on top of all the above.

For a realistic monthly cost, take the P&I number from this calculator and add roughly 1.5% of the home's value annually for taxes-plus-insurance, plus PMI if you're under 20% down, plus any HOA dues.

Fixed-rate vs adjustable-rate (ARM)

This calculator models fixed-rate loans, where the interest rate stays constant for the entire term. That's the default and most common choice in the US. ARMs (adjustable-rate mortgages) start at a lower introductory rate that resets to a market-tied rate after a fixed period, most commonly written as 5/1, 7/1, or 10/1, where the first number is the years of fixed rate and the second is how often the rate adjusts thereafter (usually annually).

ARMs make sense when (a) you're confident you'll sell or refinance before the reset, (b) you can afford a substantially higher payment if rates rise, or (c) the introductory rate is meaningfully below the comparable fixed rate. For most buyers planning to stay long-term, a fixed-rate loan removes the timing risk entirely, at the cost of a slightly higher rate today.

How rate, term, and down payment interact

Three numbers drive the monthly payment. Each has a different sensitivity that's worth knowing before you start shopping:

• Rate, the most sensitive lever. A 1% rate change on a $400,000 30-year loan changes the monthly payment by roughly $260 and the total interest by roughly $96,000.
• Term, counterintuitively less sensitive than rate on the monthly payment, but enormously sensitive on total interest. A 30-year vs 15-year loan at the same rate has a monthly payment about 35% lower but a total interest cost roughly 2.5x higher.
• Down payment, affects the monthly only through the loan amount it shrinks. The bigger value is crossing the 20% threshold, which removes PMI entirely (saving $100–$500 per month) and often qualifies you for a slightly better rate.

Common pitfalls

The biggest planning mistake is anchoring on the P&I figure without adding taxes, insurance, and PMI. A $2,500 P&I payment on paper can easily be a $3,200 PITI payment in reality, a 28% increase that derails budgets. Always pull a quote with full PITI before deciding what's affordable.

The second mistake is stretching the term to make a payment fit. A 30-year loan instead of a 15-year loan does lower the monthly bill, but you're trading away most of your equity-building speed in exchange. If a home only fits at 30 years, it's often a sign to look at a slightly less expensive home rather than a longer term.

The standard fixed-rate mortgage formula is:

M = P × [r(1+r)^n] / [(1+r)^n − 1]

Where:

• M is the monthly payment
• P is the principal (loan amount)
• r is the monthly interest rate (annual rate ÷ 12 ÷ 100)
• n is the number of monthly payments (years × 12)

The amortization schedule shows how each payment splits between interest and principal. Early in the loan, most of the payment goes to interest; later, it flips and most goes to principal. Extra payments accelerate that flip, every extra dollar goes straight to principal, eliminating all the future interest that dollar would have generated.

Walking through the first payment

Take a $350,000 loan at 6.75% over 30 years as a concrete example. The monthly rate r is 0.0675 / 12 ≈ 0.005625. The number of payments n is 30 × 12 = 360. Plugging in produces a monthly payment of about $2,270.

For the very first payment:

• Interest portion: $350,000 × 0.005625 ≈ $1,969
• Principal portion: $2,270 − $1,969 ≈ $301

Of your first $2,270 payment, only about $301 actually reduces what you owe. The remaining $1,969 is the cost of borrowing for that month. After payment 1, your new balance is $350,000 − $301 = $349,699, and the interest charge on payment 2 is computed against that lower balance.

Why extra principal payments compound

Suppose you add $200 extra in month 1. The remaining balance after payment 1 is now $350,000 − $301 − $200 = $349,499 instead of $349,699. That $200 isn't just $200 saved, it's $200 of principal that would have generated interest every single month for the next 359 months. At 6.75%, removing $200 from the balance permanently saves roughly $400–$450 in lifetime interest. The earlier in the loan you make the extra payment, the larger the multiplier.

Doing this consistently, adding even a modest $100–$200 per month against principal, typically shaves 4–7 years off the term and tens of thousands off the total interest bill, with no formal refinance, no closing costs, and no commitment to keep doing it if your situation changes.