Free Mortgage Calculator
Calculate your monthly mortgage payment based on home price, down payment, interest rate, and loan term. See total interest paid, total cost of the loan, and your payment breakdown. Free and private.
How Mortgage Payments Are Calculated
A fixed-rate mortgage payment is calculated using a standard amortization formula that distributes principal and interest evenly over the loan term. Each monthly payment is the same amount, but the proportion going to principal vs. interest changes over time — early payments are mostly interest, while later payments are mostly principal.
Mortgage Payment Formula
M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1]
Where:
- M = Monthly payment
- P = Loan principal (home price minus down payment)
- r = Monthly interest rate (annual rate / 12)
- n = Total number of payments (years × 12)
Example Calculations
Example 1: $350,000 Home, 20% Down, 6.5% Rate, 30 Years
- Loan: $350,000 − $70,000 = $280,000
- Monthly payment: $1,770.09
- Total interest: $357,233
- Total cost: $637,233
Example 2: Same Home, 15-Year Loan
- Monthly payment: $2,440.62 (38% higher)
- Total interest: $159,311 (55% less!)
- Total cost: $439,311
A 15-year mortgage saves $197,922 in interest vs. a 30-year mortgage.
How Down Payment Affects Your Mortgage
A larger down payment reduces your loan amount, monthly payment, and total interest. With less than 20% down, most lenders require Private Mortgage Insurance (PMI), adding $50-$200+/month. Getting to 20% down eliminates PMI and significantly reduces your monthly costs.
Comparing 15-Year vs 30-Year Mortgages
A 15-year mortgage has higher monthly payments but dramatically lower total interest. Over the life of the loan, you could save tens or hundreds of thousands of dollars. Choose 15 years if you can afford the higher payments; choose 30 years for lower monthly obligation and more cash flow flexibility.
What This Calculator Does Not Include
This calculator shows principal and interest only. Your actual monthly housing cost also includes property taxes (0.5-2.5% of home value annually), homeowner's insurance ($1,000-$3,000/year), PMI (if under 20% down), HOA fees (if applicable), and maintenance costs (typically 1% of home value/year). Factor these into your budget when determining affordability.
Frequently Asked Questions
How is a mortgage payment calculated?
Using the amortization formula: M = P[r(1+r)^n]/[(1+r)^n-1], where P is loan principal, r is monthly interest rate, and n is total payments. This gives a fixed monthly payment that covers both principal and interest.
Should I choose a 15-year or 30-year mortgage?
A 15-year mortgage has higher monthly payments but saves tens of thousands in interest. A 30-year mortgage has lower payments but costs more overall. Choose based on what you can comfortably afford monthly.
What is PMI and when is it required?
Private Mortgage Insurance (PMI) is required when your down payment is less than 20%. It protects the lender in case of default and typically costs 0.3-1.5% of the loan amount annually, added to your monthly payment.
Does this include taxes and insurance?
The calculator optionally includes property tax and insurance. The base calculation is principal and interest only. Your actual monthly cost may also include PMI and HOA fees.
How do I know what interest rate I will get?
Interest rates depend on your credit score, down payment, loan term, and market conditions. Check current rates with multiple lenders. Even a 0.5% difference can save tens of thousands over the loan life.