Mortgage Calculator
Loan = home price − down payment
How Mortgage Payments Work
A mortgage is a long-term loan secured by real estate, typically repaid over 15 or 30 years with fixed monthly payments. The payment calculation uses the same amortization formula as other installment loans: M = P × [r(1+r)^n] / [(1+r)^n − 1]. For a $300,000 loan at 6.5% over 30 years, the monthly payment is approximately $1,896.20 — but this covers only principal and interest (P&I).
Your actual housing payment is usually higher. Property taxes, homeowners insurance, and private mortgage insurance (PMI) if your down payment is less than 20% add to the monthly obligation. These costs vary by location and lender but can add $300–800 or more to the base P&I payment. Always budget for the full housing cost, not just the mortgage payment alone.
Interest rate and term dramatically affect affordability and total cost. A $250,000 mortgage at 5.5% over 30 years costs $1,419.47/month with $261,009 in total interest. The same loan over 15 years at 5.0% costs $1,978.20/month but only $106,076 in interest — saving over $150,000 in interest at the cost of a higher monthly payment. The 15-year option builds equity much faster.
Down payment size affects both your loan amount and whether PMI is required. A 20% down payment on a $400,000 home means borrowing $320,000 instead of $380,000 (with 5% down), saving roughly $360/month on P&I alone plus eliminating PMI. However, tying up cash in a down payment means less available for emergencies, investments, or home improvements.
Use this calculator to estimate your principal-and-interest payment when house hunting or refinancing. Enter the loan amount (purchase price minus down payment), annual interest rate, and term to see your monthly payment and total repayment over the life of the loan.
Examples
| Example | Result |
|---|---|
| $300,000 at 6.5% for 30 years | Monthly payment $1,896.20, total $682,632 |
| $250,000 at 5.5% for 30 years | Monthly payment $1,419.47, total $511,009 |
| $400,000 at 7% for 15 years | Monthly payment $3,596.57, total $647,383 |
| $350,000 at 6% for 30 years | Monthly payment $2,098.43, total $755,432 |
| $200,000 at 5% for 15 years | Monthly payment $1,581.59, total $284,686 |
| $500,000 at 6.25% for 30 years | Monthly payment $3,078.59, total $1,108,291 |
| $150,000 at 4.5% for 20 years | Monthly payment $948.97, total $227,754 |
Frequently asked questions
Principal and interest (P&I) are the core payment. Many lenders also collect property taxes, insurance, and PMI in an escrow account as part of your monthly bill.
A 15-year mortgage has higher payments but far less total interest and faster equity buildup. A 30-year mortgage offers lower payments and more flexibility.
A larger down payment reduces the loan amount, lowers monthly payments, and may eliminate PMI if you put down 20% or more.