How to use this mortgage calculator
- Enter the home price and your down payment, as a dollar amount or a percentage. Under 20% down usually means paying PMI.
- Choose the loan term and interest rate. Use the rate from your lender’s quote or Loan Estimate, not the APR.
- Add taxes, insurance and fees. Your county’s property tax rate, an insurance quote and any HOA dues give you the true monthly cost.
- Try extra payments to see how much sooner you could be mortgage-free and how much interest you’d save.
Everything updates as you type. The page address saves your scenario, so you can bookmark it or share it with a partner or loan officer.
How your monthly mortgage payment is calculated
The principal-and-interest part of a fixed-rate mortgage uses the standard amortization formula:
- M: your monthly principal and interest payment
- P: the loan amount (home price minus down payment)
- r: the monthly interest rate (annual rate ÷ 12)
- n: the number of monthly payments (years × 12)
Example: A $400,000 home with $80,000 down (20%) leaves a $320,000 loan. At 7% for 30 years, r = 7% ÷ 12 = 0.005833 and n = 360, so M = $2,128.97. Add $4,400/year in property tax and $1,800/year for insurance, and the total is $2,645.64 a month. Over the full term you’d pay $446,427 in interest.
What’s included in a mortgage payment
Most monthly payments have four core parts, often called PITI, plus a couple of possible extras:
- Principal: the part that pays down what you borrowed. It grows a little every month.
- Interest: what the lender charges, based on your remaining balance. It’s the largest share early in the loan.
- Taxes: property tax, usually collected monthly by your lender into an escrow account and paid to your county.
- Insurance: homeowners insurance, also typically paid through escrow.
- PMI: private mortgage insurance, required on most conventional loans with less than 20% down. With 10% down in our example, PMI adds $150.00 a month until 2036.
- HOA dues: if the home is in a homeowners association. These are usually paid separately but still part of your monthly housing cost.
15-year vs. 30-year vs. 20-year mortgage
A shorter loan raises the monthly payment but cuts total interest sharply. For the same $320,000 loan at 7%:
| Term | Monthly P&I | Total interest |
|---|---|---|
| 30 years | $2,128.97 | $446,427 |
| 20 years | $2,480.96 | $275,428 |
| 15 years | $2,876.25 | $197,725 |
In practice, 15-year rates are usually lower than 30-year rates, which makes the interest gap even bigger.
How your interest rate changes the payment
Small rate differences add up. On a $320,000, 30-year loan, going from 6% to 7% raises the payment by $210 a month. Going from 7% to 8% adds another $219. Over the life of the loan, each percentage point is worth tens of thousands of dollars. Comparing quotes from several lenders is one of the easiest ways to save.
How extra payments save you money
Interest is charged on your remaining balance, so every extra dollar of principal cuts the interest on every later payment. Paying an extra $200 a month on our example loan pays it off 6 years 9 months early and saves about $118,971 in interest.
Common ways to prepay:
- Round up your payment, for example from $2,646 to the next even hundred.
- One extra payment a year: the same effect as paying half your payment every two weeks (biweekly).
- Lump sums from a bonus, tax refund or windfall.
Before prepaying, check that your loan has no prepayment penalty. Ask your servicer to apply the extra to principal. It also often makes sense to build an emergency fund and pay off higher-interest debt first.
Ways to lower your monthly payment
- Put more down, ideally 20% to avoid PMI.
- Improve your credit score before applying. Better scores qualify for lower rates.
- Shop several lenders and compare Loan Estimates side by side.
- Consider buying points if you plan to keep the loan long enough to break even.
- Shop homeowners insurance and check your property tax assessment for errors.
- Refinance if rates drop meaningfully below your current rate.
Your actual rate, payment, taxes and insurance will depend on your lender, location and credit profile.
Frequently asked questions
How is a monthly mortgage payment calculated?
Lenders use the standard amortization formula: M = P × r(1+r)^n / ((1+r)^n − 1), where P is the loan amount, r is the annual rate divided by 12, and n is the number of monthly payments. For a $320,000 loan at 7% over 30 years, that comes to $2,128.97 a month for principal and interest. Property tax, homeowners insurance, PMI and HOA dues are added on top.
Does this mortgage calculator include taxes and insurance?
Yes. Your estimated payment includes principal, interest, property tax, homeowners insurance, private mortgage insurance (PMI) when your down payment is under 20%, and HOA fees. This is often called PITI. Set any field to zero to leave it out.
When does PMI go away?
On a conventional loan, you can usually ask your lender to cancel PMI once your balance reaches 80% of the home’s original value. It must end automatically when the balance is scheduled to reach 78%. The calculator stops charging PMI at 78%. FHA loans use a different kind of mortgage insurance (MIP) that often lasts much longer.
How much do extra payments save?
Every extra dollar goes straight to principal, so you pay less interest from then on. In our example $320,000 loan at 7%, paying $200 more each month pays the loan off 6 years 9 months early and saves about $118,971 in interest. Open “Extra payments” in the calculator to see your own numbers.
Should I choose a 15-year or 30-year mortgage?
A 15-year loan has a much higher monthly payment but far less total interest, and 15-year rates are usually lower too. At the same 7% rate, the 15-year payment on $320,000 is $2,876 versus $2,129, but it saves about $248,702 in interest. A 30-year loan gives you a lower required payment and flexibility. You can still prepay it like a shorter loan.
What is the difference between the interest rate and APR?
The interest rate determines your monthly payment. The APR (annual percentage rate) also folds in lender fees and points, so it’s a better number for comparing loan offers. Enter the interest rate, not the APR, in this calculator.
How much house can I afford?
A common guideline is to keep your total housing payment at or below 28% of your gross monthly income, and all debt payments (housing plus car loans, student loans and credit cards) at or below 36%. Lenders may approve more, but staying near these limits leaves room for savings and surprises.
Can I save or share my results?
Yes. The page address updates as you type, so you can bookmark it or use “Copy link to results” to share your exact scenario. You can also download the full amortization schedule as a CSV file for Excel or Google Sheets. Your numbers stay in your browser and are never sent to us.
Updated November 2026. Results are estimates for educational purposes and depend on the inputs you provide.