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Mortgage calculator: payment, interest and amortization

Home price, down payment, interest rate and term. We'll show your payment, the interest you'll pay and how much you save with extra payments.

Updated

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$

Putting down less than 20% usually means paying private mortgage insurance (PMI).

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The annual rate on your loan offer, not the APR with fees.

years
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Additional money you put toward the principal each month. It shortens the loan. Optional.

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To see what share of your income the payment takes. Optional.

Your mortgage

Enter the price, rate and term to see your payment.

How this calculator works

Enter the home price, your down payment, the interest rate and the loan term, and you’ll get your monthly payment, the total interest you’ll pay and a year-by-year amortization schedule. Add your take-home pay and it also tells you what share of your income the payment eats up.

The most useful field is extra payment per month: it shows how much interest you save and how many months sooner you’re debt-free if you pay a little more than you have to.

The mortgage payment formula

Almost every US mortgage is a fully amortizing loan, which means one simple thing: you pay the same amount every month. What changes is how that payment is split between interest and principal.

M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)

  • P: the loan amount, which is the price minus your down payment.
  • r: the monthly rate, the annual rate divided by 1,200.
  • n: the number of payments, the years times 12.

Each month, the interest is the remaining balance times r, and the rest of the payment reduces the balance. As the balance falls, so does the interest, and more of each payment goes to principal. That’s the whole mechanism.

Example: a $400,000 home with 20% down

Put $80,000 down and borrow $320,000 at 6.5% for 30 years:

  • Monthly payment (principal and interest): $2,022.62
  • Total repaid: $728,142
  • Total interest: $408,142, more than the amount you borrowed
  • First year: about $20,695 of interest and only $3,577 of principal

Now the part that surprises people: add $200 extra every month to that same loan and you pay it off 79 months early, six and a half years, and keep $105,429 of interest in your pocket. Try it in the extra payment field.

With only 10% down, the loan grows to $360,000: the payment rises to $2,275.44 and the total interest to $459,160, before counting PMI.

15-year vs 30-year mortgage

Same $320,000 loan, same 6.5% rate:

TermMonthly paymentTotal interest
30 years$2,022.62$408,142
15 years$2,787.54$181,758

The shorter loan costs $765 more a month but saves more than $226,000 of interest, and in real life lenders usually charge a lower rate on 15-year loans, so the difference is even bigger.

What your real monthly payment includes

This calculator gives you principal and interest. The check you actually write each month, often called PITI, usually adds:

  • Property taxes, which vary enormously by state and county, from well under 1% of the home’s value a year to over 2%.
  • Homeowners insurance, required by every lender.
  • PMI, if you put down less than 20% on a conventional loan.
  • HOA dues, if the home is in a homeowners association.

Lenders often collect taxes and insurance through an escrow account, so they show up in the same monthly payment. Ask for a Loan Estimate: it lists every one of these costs.

How much house can you afford?

The rule of thumb lenders use is 28/36: housing costs shouldn’t exceed 28% of your gross monthly income, and all your debt payments together shouldn’t exceed 36%. This calculator measures the payment against your take-home pay instead, because that’s the money you actually have, and warns you above 35%.

Don’t forget the cash you need up front: besides the down payment, closing costs typically run 2% to 5% of the loan amount.

Limits of this calculator

It calculates fixed-rate loans. An adjustable-rate mortgage (ARM) resets after its initial period, and nobody can predict where rates will be; if yours is an ARM, run the numbers at the current rate and again two points higher to see a bad-case scenario.

It doesn’t include taxes, insurance, PMI or closing costs. To see how extra savings could grow instead of going into the house, try the compound interest calculator.

Frequently asked questions

How is a mortgage payment calculated?

With the standard amortization formula: M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r is the monthly interest rate (the annual rate divided by 12 and by 100) and n is the number of monthly payments. A $320,000 loan at 6.5% over 30 years works out to $2,022.62 a month in principal and interest.

Why does most of my early payment go to interest?

Because interest is charged each month on the balance you still owe, and at the start you owe almost all of it. On a $320,000 loan at 6.5%, the first year's payments add up to about $24,271, of which roughly $20,695 is interest and only $3,577 goes to principal. The split slowly flips over the life of the loan, which is why extra payments made early save far more than extra payments made late.

How much should I put down?

Twenty percent is the classic target because it lets you avoid private mortgage insurance (PMI) on a conventional loan. Many buyers put down less: FHA loans allow 3.5% and some conventional programs 3%. A smaller down payment isn't a mistake in itself, but it means a bigger loan, more interest and usually PMI until you reach 20% equity.

What is PMI and when does it go away?

Private mortgage insurance protects the lender, not you, and it's usually required on conventional loans with less than 20% down. Under the Homeowners Protection Act you can ask to cancel it once your balance reaches 80% of the home's original value, and it must end automatically at 78%. FHA loans work differently: their mortgage insurance often lasts for the life of the loan.

Is it worth paying extra toward principal?

At today's rates it usually is: every extra dollar earns a guaranteed return equal to your interest rate, with no risk. On a $320,000 loan at 6.5%, an extra $200 a month pays it off 79 months early and saves $105,429 in interest. Before you do it, make sure you have an emergency fund and no higher-interest debt such as credit cards.

Should I choose a 15-year or a 30-year mortgage?

A 15-year loan has a much higher payment but costs far less overall: on $320,000 at 6.5%, the payment rises from $2,022.62 to $2,787.54, while total interest drops from $408,142 to $181,758. In practice 15-year loans also come with a lower rate, which widens the gap. If the higher payment would strain your budget, a 30-year loan with voluntary extra payments gives you similar savings with more flexibility.

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