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mortgagebeginner8 min

Mortgage Calculator

Calculate your monthly mortgage payment with our free mortgage calculator. Estimate payments for different loan terms, interest rates, and down payments.

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Monthly Payment

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Full Results

Principal & Interest

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Taxes & Insurance

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Total Interest Paid

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Total Payment

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Payoff Date

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Loan Amount

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Down Payment

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Monthly Payment Breakdown

What is Mortgage Calculator?

A mortgage is a loan used to purchase a home or property. The property itself serves as collateral for the loan. Most mortgages have a fixed or adjustable interest rate and are paid back over 15 to 30 years.

How It Works

When you take out a mortgage, you borrow money from a lender to buy a home. You then make monthly payments that include both principal (the amount you borrowed) and interest (the cost of borrowing). Additional costs like property taxes, insurance, and PMI may be included in your monthly payment.

The Formula

M = P × [r(1+r)^n] / [(1+r)^n - 1]

M = Monthly payment, P = Loan principal, r = Monthly interest rate (annual rate / 12), n = Total number of payments (loan term × 12)

Examples

Example: $450,000 Home at 6.5%

A $450,000 home with 20% down payment ($90,000), 6.5% interest rate, 30-year term

With a $360,000 loan at 6.5% for 30 years, the monthly principal and interest payment is $2,276. Adding $300/month for property taxes and $100/month for insurance brings the total to $2,676 per month.

Pros & Cons

Pros

  • ✓Build equity over time
  • ✓Tax benefits (mortgage interest deduction)
  • ✓Fixed payments with a fixed-rate mortgage
  • ✓Potential property appreciation

Cons

  • ✗Large long-term debt commitment
  • ✗Interest costs can be substantial
  • ✗Risk of foreclosure if payments are missed
  • ✗Closing costs and fees

Common Mistakes to Avoid

  • !Not shopping around for the best rate
  • !Ignoring closing costs in the total cost
  • !Choosing the wrong loan term for your situation
  • !Not accounting for property taxes and insurance

Expert Tips

  • ★Get pre-approved before house hunting
  • ★Consider buying points to lower your rate
  • ★Make extra principal payments when possible
  • ★Don't max out your budget—leave room for other expenses

Frequently Asked Questions

How much house can I afford?
A common rule is that your monthly housing costs should not exceed 28% of your gross monthly income. Use our affordability calculator for a more precise estimate based on your income, debts, and down payment.
Should I get a 15-year or 30-year mortgage?
A 15-year mortgage has higher monthly payments but significantly less total interest. A 30-year mortgage has lower monthly payments but you pay more interest over time. Choose based on your cash flow and financial goals.
How does my credit score affect my mortgage rate?
Your credit score directly impacts the interest rate you qualify for. A higher credit score (740+) typically gets you the best rates, potentially saving you tens of thousands over the life of the loan.
What is PMI and when can I cancel it?
PMI (Private Mortgage Insurance) is required when your down payment is less than 20%. It protects the lender, not you. You can request cancellation once you reach 20% equity in your home.
How does the down payment amount affect my mortgage?
A larger down payment means a smaller loan amount, lower monthly payments, and less interest paid over time. A 20% down payment also eliminates the need for PMI. However, there are programs with as little as 3-5% down for qualified buyers.

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Amortization

Generate a full amortization schedule for your loan. See monthly breakdowns of principal, interest, and balance over the life of your loan.

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