Mortgage Calculator

A mortgage is built from a handful of moving parts, and each one has a direct effect on your monthly payment. The loan amount is simply the home price minus your down payment — the bigger the down payment, the smaller the loan. The loan term spreads that amount over 15, 20, or 30 years; shorter terms usually carry a lower rate but a higher monthly payment. The interest rate is the lender's charge for the loan, and even a small change here compounds into a large difference over the life of the loan — try nudging the rate in the calculator above and watch the "Payment by Interest Rate" chart move.

Most lenders also want to see at least a 20% down payment. Putting down less usually means paying for private mortgage insurance (PMI) until enough of the loan is paid off, since the lender is taking on more risk with a smaller upfront cushion. In the U.S., PMI generally stays in place until the loan balance drops below roughly 80% of the home's original value, at which point a borrower can typically request that it be removed.

Every monthly payment is really two payments bundled into one: a portion that goes toward principal (paying down what you actually borrowed) and a portion that goes toward interest (the lender's fee for the loan). In the early years of a 30-year loan, interest makes up the majority of each payment — that's visible in the "Principal vs. Interest by Year" chart above, where the blue principal bars start small and grow taller each year as the balance shrinks and less interest accrues on it.

This calculator assumes a fixed-rate mortgage, where the interest rate stays the same for the entire term. That's the most common structure in the U.S., and it makes budgeting simple — your principal-and-interest payment never changes, even if market rates move sharply in either direction.

The alternative is an adjustable-rate mortgage (ARM), where the rate is fixed for an initial period — often 5, 7, or 10 years — and then adjusts periodically based on a market index. ARMs typically start with a lower rate than a comparable fixed loan, which can make sense if you plan to sell or refinance before the adjustable period begins. The trade-off is uncertainty: once the fixed period ends, your payment can rise (or fall) with the broader rate environment, and it's worth stress-testing what a higher rate would mean for your budget before choosing this route.

The number this calculator produces covers principal and interest only. In practice, owning a home usually comes with a few recurring costs on top of that payment, often bundled by lenders into what's called PITI — principal, interest, taxes, and insurance:

• Property taxes — billed by local government, typically around 1% of the home's value per year nationally, though this varies a lot by state and county.
• Homeowners insurance — protects against damage and liability; cost depends on location, home age, and coverage level.
• PMI — required on many loans with less than 20% down, typically 0.3%–1.9% of the loan amount per year until it's removed.
• HOA dues — common for condos and some planned communities, usually a modest annual percentage of the property's value.
• Maintenance — a rough rule of thumb is to budget around 1% of the home's value per year for upkeep and repairs.

None of these are part of the "Monthly Payment" figure above, so it's worth padding your budget before assuming a number is affordable. A useful gut-check: add up taxes, insurance, and an estimated PMI, divide by 12, and add that to the calculator's monthly payment to see a more realistic all-in figure.

Beyond the ongoing monthly costs, buying a home usually involves a round of one-time expenses that this calculator doesn't include, since they're paid once rather than monthly:

• Closing costs — typically 2%–5% of the loan amount, covering things like appraisal, title, and lender fees.
• Initial repairs or renovations — flooring, paint, or fixture updates before or shortly after move-in.
• Moving and setup costs — movers, new furniture, and appliances.

It's common for buyers to underestimate this bucket, so it's worth setting aside a cash cushion beyond the down payment itself before closing.

Borrowers who want to save on interest generally have three levers: pay a bit extra every month, switch to biweekly half-payments (which quietly adds up to one extra full payment a year), or refinance into a shorter term when rates allow. Any of these shrinks the "Remaining Balance Over Time" curve above faster than the standard schedule, and even a modest recurring extra payment compounds into meaningful interest savings over a 30-year term.

That said, paying ahead isn't automatically the best move for everyone. If your mortgage rate is lower than what you could realistically earn investing that same money elsewhere, extra payments can cost you the difference in opportunity — and check your loan for any prepayment penalty before committing to it. It's also worth keeping an emergency fund intact before directing extra cash toward the mortgage; a paid-down loan doesn't help if an unexpected expense forces you to borrow at a worse rate elsewhere.

Refinancing means replacing your current mortgage with a new one, usually to get a lower rate, change the loan term, or tap into home equity. It generally makes the most sense when the new rate is meaningfully lower than your current one and you plan to stay in the home long enough for the interest savings to outweigh the closing costs on the new loan.

A common way to check whether refinancing is worth it is to calculate the "break-even point" — how many months of lower payments it takes to recover the refinancing costs. If you're planning to sell or move before that break-even point, refinancing usually isn't worthwhile.

• Principal — the amount actually borrowed (home price minus down payment).
• Interest — the lender's charge for the loan, expressed as an annual percentage rate (APR).
• Amortization — the process of paying off a loan through regular payments that cover both principal and interest, with the mix shifting over time.
• Escrow — an account, often managed by the lender, that collects a portion of property tax and insurance each month and pays them on your behalf when due.
• PMI (Private Mortgage Insurance) — insurance required on many loans with less than 20% down, protecting the lender (not the borrower) if the loan defaults.
• Equity — the portion of the home you actually own: home value minus remaining loan balance.

The monthly principal-and-interest payment formula is:

Where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12).

Example: A $320,000 loan at 6.5% annual interest over 30 years.

• P = $320,000
• r = 6.5% ÷ 12 = 0.5417% = 0.005417 (as a decimal)
• n = 30 × 12 = 360 payments

Plugging into the formula:

Over 360 payments, that comes to roughly $727,816 total paid — meaning about $407,816 of the total is interest, more than the original loan amount. That's the direct, numeric result of borrowing over three decades at this rate; shortening the term or lowering the rate both pull that interest total down significantly, which you can see by adjusting the calculator above.

• The 30-year fixed-rate mortgage is by far the most common structure in the U.S., prized for its predictable, unchanging payment.
• A 15-year mortgage typically carries a lower interest rate than a 30-year loan on the same property, but a meaningfully higher monthly payment.
• Skipping just one extra payment a year (13 payments instead of 12) can shave several years off a 30-year mortgage.
• PMI on a conventional loan can typically be cancelled once the loan balance drops to 80% of the home's original value.
• Mortgage interest is often tax-deductible for taxpayers who itemize, though the standard deduction covers most filers.

On the same $320,000 loan at 6.5%, comparing common term lengths:

The 15-year loan costs $766 more per month but saves over $226,000 in lifetime interest — illustrating how dramatically term length affects total cost even at the same rate.

• Shopping for a home before getting pre-approved — you may fall for a home outside your realistic budget.
• Only comparing the interest rate — APR, points, and fees can make a "lower rate" loan actually cost more.
• Making a large purchase before closing — new debt can affect DTI and jeopardize final approval.
• Skipping the home inspection — not required by lenders but can reveal costly issues before you're committed.
• Not shopping multiple lenders — rate offers can vary meaningfully between lenders for the same borrower.