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Mortgage Calculator

Calculate your monthly mortgage payment, total interest, and view a full amortization schedule. Includes property tax, insurance, PMI, and extra payment analysis.

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Mortgage calculator. Monthly payment, total interest, and amortization schedule.
A mortgage calculator computes your monthly payment by combining principal, interest, taxes, insurance, and PMI for any loan amount, rate, and term. It generates a full amortization schedule showing how each payment splits between interest and principal over the life of the loan.

What Is a Mortgage?

A mortgage is a loan used to purchase real estate, where the property itself serves as collateral for the lender. In the United States, the most common mortgage is a 30-year fixed-rate loan, though 15-year and 20-year terms are also popular. As of March 2026, the average 30-year fixed mortgage rate in the US is approximately 6.11%, while 15-year fixed rates average around 5.50%.
Mortgage payments are typically structured using French amortization, meaning you pay a fixed monthly amount over the entire loan term. Each payment is split between principal (reducing your loan balance) and interest (the cost of borrowing). In the early years, most of your payment goes toward interest. Over time, the balance shifts and more of each payment reduces your principal. This gradual shift is what creates the characteristic amortization curve.
Your total monthly housing cost goes beyond just principal and interest. It also includes property taxes, homeowners insurance, and potentially private mortgage insurance (PMI) if your down payment is less than 20%. Lenders often refer to this total as PITI — Principal, Interest, Taxes, and Insurance. Understanding all four components is essential for accurately budgeting your home purchase.

How to Calculate Your Monthly Mortgage Payment

To calculate your monthly mortgage payment, you need three key inputs: the loan amount (home price minus down payment), the annual interest rate, and the loan term in years. Here is the step-by-step process:
1. Determine your loan amount. Subtract your down payment from the home price. For example, a $400,000 home with a 10% down payment ($40,000) gives you a loan amount of $360,000.
2. Convert the annual interest rate to a monthly rate. Divide the annual rate by 12. At 6.11%, the monthly rate is 0.0611 / 12 = 0.005092.
3. Calculate the total number of payments. Multiply the loan term in years by 12. A 30-year mortgage has 360 payments.
4. Apply the mortgage payment formula. Plug these values into the standard amortization formula (shown in the next section) to get your monthly principal and interest payment.
5. Add property taxes, insurance, and PMI. Divide your annual property tax and insurance premiums by 12, then add them to your base payment.
Using the example above ($360,000 loan at 6.11% for 30 years), the monthly principal and interest payment is approximately $2,185. Add $333 for property taxes ($4,000/year), $125 for homeowners insurance ($1,500/year), and $150 for PMI, and your total monthly payment comes to roughly $2,793.

Mortgage Payment Formula

M=P×r(1+r)n(1+r)n−1M = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1}
  • MM = Monthly mortgage payment (principal and interest only)
  • PP = Principal loan amount (home price minus down payment)
  • rr = Monthly interest rate (annual rate divided by 12)
  • nn = Total number of monthly payments (loan term in years multiplied by 12)
This is the standard French amortization formula used by virtually every mortgage lender in the United States. It produces a fixed monthly payment that remains constant throughout the life of the loan.
To understand the math, consider a $300,000 loan at 6% annual interest for 30 years. The monthly rate is 0.06 / 12 = 0.005, and the total number of payments is 360. Plugging these into the formula:
M=300,000×0.005×(1.005)360(1.005)360−1=300,000×0.005×6.02266.0226−1=$1,798.65M = 300{,}000 \times \frac{0.005 \times (1.005)^{360}}{(1.005)^{360} - 1} = 300{,}000 \times \frac{0.005 \times 6.0226}{6.0226 - 1} = \$1{,}798.65
Over 30 years, you will pay a total of $647,514 — meaning $347,514 goes to interest alone, more than the original loan amount. This is why even small rate reductions or extra payments can save tens of thousands of dollars.
For the total monthly housing payment, add the escrow components:
Total Payment=M+Annual Property Tax12+Annual Insurance12+PMI\text{Total Payment} = M + \frac{\text{Annual Property Tax}}{12} + \frac{\text{Annual Insurance}}{12} + \text{PMI}
PMI typically ranges from 0.5% to 1.5% of the original loan amount per year, divided by 12 for the monthly cost. It is required when the down payment is less than 20% and can be removed once you reach 20% equity.

Mortgage Payment Examples

First-Time Buyer: $350,000 Home with 10% Down

A first-time buyer purchases a $350,000 home with a 10% down payment ($35,000), leaving a loan amount of $315,000. At a 6.11% interest rate on a 30-year fixed mortgage, the monthly principal and interest payment is $1,912. Adding annual property taxes of $4,200 ($350/month), homeowners insurance of $1,680 ($140/month), and PMI of approximately $158/month (0.6% of the loan annually), the total monthly payment is $2,560. Over the full 30 years, the borrower pays $688,320 in principal and interest — $373,320 of which is interest. PMI drops off once the loan balance reaches 80% of the original home value ($280,000), which happens around year 9 with regular payments.

Comparing 15-Year vs. 30-Year on a $400,000 Loan

On a $400,000 loan at 5.50% (15-year) vs. 6.11% (30-year), the numbers tell a striking story. The 30-year mortgage has a monthly P&I payment of $2,428, while the 15-year mortgage costs $3,269 per month — $841 more. However, over the life of the loan, the 30-year borrower pays $474,080 in total interest, while the 15-year borrower pays only $188,420. That is $285,660 in interest savings by choosing the shorter term. The tradeoff is a significantly higher monthly payment, which may limit how much you can invest elsewhere. If you can comfortably afford the higher payment, a 15-year mortgage builds equity faster and saves a substantial amount of interest.

Extra Payments: Saving $100,000 with $300/Month Extra

Take a $350,000 loan at 6.11% for 30 years with a base P&I payment of $2,125. If the borrower adds $300 per month in extra principal payments, the loan is paid off in approximately 22 years instead of 30 — saving roughly 8 years of payments. The total interest paid drops from $415,000 to approximately $312,000, a savings of about $103,000. Even adding just $100 per month in extra payments saves around $42,000 in interest and shaves nearly 4 years off the mortgage. These extra payments go entirely toward reducing the principal, which means less interest accrues on every subsequent payment — creating a compounding savings effect.

Tips to Save Money on Your Mortgage

  • Aim for a 20% down payment to avoid PMI. On a $400,000 home, PMI at 0.7% adds roughly $187/month to your payment — over $2,200 per year — until you reach 20% equity. Putting down 20% upfront eliminates this cost entirely.
  • Shop around for the best interest rate. Even a 0.25% rate difference on a $300,000 mortgage saves approximately $16,000 in interest over 30 years. Get quotes from at least 3-4 lenders, including credit unions and online lenders.
  • Make extra payments toward principal whenever possible. Even one extra payment per year on a 30-year mortgage can shave 4-5 years off the loan and save tens of thousands in interest. Direct any windfalls, bonuses, or tax refunds toward your mortgage principal.
  • Consider biweekly payments instead of monthly. By paying half your monthly amount every two weeks, you make the equivalent of 13 monthly payments per year instead of 12. On a $350,000 loan at 6%, this strategy can save over $60,000 in interest and pay off the mortgage roughly 5 years early.
  • Review your property tax assessment annually. Property tax assessments can contain errors, and values may not reflect current market conditions. If your assessed value seems too high, file an appeal with your county assessor — a successful appeal could save hundreds of dollars per year.
  • Refinance when rates drop significantly. A general rule of thumb is that refinancing makes sense when you can lower your rate by at least 0.75-1.0 percentage points. Factor in closing costs (typically 2-5% of the loan amount) and calculate your break-even point — the number of months it takes for the monthly savings to offset the refinancing costs.
  • Request PMI removal as soon as you reach 20% equity. Under the Homeowners Protection Act, lenders must automatically cancel PMI at 78% loan-to-value, but you can request cancellation at 80% LTV. If your home has appreciated in value, a new appraisal could prove you have reached 20% equity sooner than expected.

Frequently Asked Questions About Mortgages

How much house can I afford on a $100,000 salary?

Using the 28/36 rule — which recommends spending no more than 28% of gross income on housing costs — a household earning $100,000 per year can afford a monthly housing payment of roughly $2,333. At a 6.11% interest rate with 10% down, and accounting for taxes and insurance, this translates to a home price of approximately $340,000 to $380,000, depending on local property tax rates and insurance costs. Keep in mind that lenders also look at your total debt-to-income ratio (the "36" in the 28/36 rule), so existing debts like car loans or student loans will reduce the amount you qualify for.

What is PMI and when can I remove it?

Private Mortgage Insurance (PMI) is required by lenders when your down payment is less than 20% of the home price. PMI protects the lender — not you — in case of default, and typically costs between 0.5% and 1.5% of the original loan amount per year. You can request PMI removal once your loan balance drops to 80% of the original home value, and by federal law (the Homeowners Protection Act), your lender must automatically cancel PMI when the balance reaches 78%. If your home has appreciated significantly, you can order a new appraisal to prove you have reached 20% equity ahead of schedule.

What is the difference between a fixed-rate and an adjustable-rate mortgage (ARM)?

A fixed-rate mortgage locks in the same interest rate for the entire loan term, meaning your principal and interest payment never changes. An adjustable-rate mortgage (ARM) starts with a lower introductory rate for a set period (commonly 5, 7, or 10 years) and then adjusts periodically based on a market index. For example, a 5/1 ARM has a fixed rate for 5 years, then adjusts annually. ARMs can be advantageous if you plan to sell or refinance before the adjustment period begins, but they carry the risk of significantly higher payments if rates rise.

How does amortization work on a mortgage?

Amortization is the process of gradually paying off your mortgage through fixed monthly payments. Each payment is split between interest and principal. In the early years, most of your payment goes toward interest because the outstanding balance is large. For example, on a $300,000 loan at 6% for 30 years, the first month's payment of $1,799 includes $1,500 in interest and only $299 toward principal. By month 180 (halfway through), the split is roughly $948 interest and $851 principal. In the final years, nearly the entire payment goes toward principal. An amortization schedule shows this breakdown for every single payment over the life of the loan.

Is it better to choose a 15-year or 30-year mortgage?

A 15-year mortgage has higher monthly payments but saves substantially on total interest. On a $350,000 loan, the total interest paid over 15 years at 5.50% is approximately $165,000, compared to roughly $415,000 over 30 years at 6.11% — a savings of $250,000. The 30-year mortgage offers lower monthly payments and greater cash flow flexibility, which may be important if you want to invest the difference, maintain an emergency fund, or handle other financial obligations. Neither is universally better; it depends on your financial situation, risk tolerance, and other investment opportunities.

What is escrow and why is it part of my mortgage payment?

Escrow is a holding account managed by your mortgage servicer to pay property taxes and homeowners insurance on your behalf. Each month, a portion of your mortgage payment goes into this escrow account. When your property tax or insurance bills are due, the servicer pays them from the escrow balance. Lenders require escrow to ensure these critical bills are always paid — an unpaid property tax lien or lapsed insurance policy puts their collateral at risk. Your escrow payment is recalculated annually based on actual tax and insurance costs, which is why your total monthly payment can change even on a fixed-rate mortgage.

How much can I save by making one extra mortgage payment per year?

Making one extra payment per year on a 30-year mortgage can shave approximately 4 to 5 years off your loan term and save tens of thousands in interest. On a $300,000 loan at 6%, one extra annual payment of $1,799 reduces the payoff time from 30 years to about 25.5 years and saves approximately $56,000 in interest. You can achieve this by dividing your monthly payment by 12 and adding that amount to each regular payment, or by making biweekly payments (26 half-payments per year equals 13 full payments).

What are typical closing costs when buying a home in the US?

Closing costs typically range from 2% to 5% of the home purchase price. On a $400,000 home, expect to pay between $8,000 and $20,000 in closing costs. These include lender fees (origination, appraisal, credit report), title insurance, attorney fees, prepaid property taxes and insurance, and government recording fees. Some buyers negotiate with the seller to cover a portion of closing costs. Note that closing costs are separate from your down payment — you need both to complete the purchase.

Key Mortgage Terms

Amortization

The process of paying off a mortgage through scheduled, fixed monthly payments that cover both principal and interest. Early payments are mostly interest; later payments are mostly principal.

PITI

Stands for Principal, Interest, Taxes, and Insurance — the four components that make up a typical total monthly mortgage payment.

PMI (Private Mortgage Insurance)

Insurance required by lenders when the borrower's down payment is less than 20%. Typically costs 0.5%-1.5% of the loan amount annually and can be removed at 80% loan-to-value ratio.

Escrow

A holding account managed by the mortgage servicer to collect and pay property taxes and homeowners insurance on behalf of the borrower.

Loan-to-Value Ratio (LTV)

The ratio of the mortgage balance to the appraised value of the property. An LTV of 80% or less typically means no PMI is required.

APR (Annual Percentage Rate)

The total annual cost of borrowing, including the interest rate plus lender fees and other charges, expressed as a percentage. APR is always higher than the base interest rate.

Down Payment

The upfront cash payment a buyer makes toward the home purchase price. A larger down payment reduces the loan amount, monthly payments, and may eliminate the need for PMI.