Mortgage Calculator

What each input means

• Home price: the purchase price of the property.
• Down payment: the cash you pay upfront. You can enter it as a dollar amount or as a percentage of the price.
• Loan amount (principal): home price minus down payment. This is what you borrow and what interest is charged on.
• Interest rate: the annual rate on the loan. Each month, one-twelfth of it is applied to the remaining balance.
• Loan term: how many years you have to repay, with one payment per month (for example, 15 or 30 years).

Mortgage payment formula

P = Home price − Down payment
i = Annual rate ÷ 12      n = Years × 12
Monthly payment = P × i ÷ (1 − (1 + i)^−n)
Total interest = Monthly payment × n − P

At a 0% rate, the payment is simply P ÷ n. Early payments are mostly interest; as the balance drops, more of each payment goes to principal.

How to read the results

• Monthly payment: principal and interest only (P&I). Property taxes, homeowners insurance and PMI are not included.
• Total interest: what borrowing costs you over the full term. On a 30-year loan it can exceed the amount you borrowed.
• Loan-to-value (LTV): loan amount ÷ home price. Lenders often require PMI on conventional loans when you put less than 20% down.
• Total cost: down payment plus every monthly payment, which is what you will have paid for the home by the end of the loan.

A longer term lowers the monthly payment but sharply increases total interest. When comparing offers, keep the down payment and term the same.

What your real monthly housing cost includes

Lenders usually look at PITI: principal, interest, taxes and insurance. This calculator covers the first two. To estimate your full monthly cost, add:

• Property taxes: set by your local government and often paid through an escrow account.
• Homeowners insurance: required by most lenders.
• PMI: private mortgage insurance, typically charged on conventional loans with less than 20% down.
• HOA dues: if the property belongs to a homeowners association.

When to use this calculator

• Before house hunting, to find a price range that fits the payment you can afford.
• To see how a bigger down payment changes your payment and total interest.
• To compare a 15-year and a 30-year term at a rate your lender quoted.
• Alongside the amortization calculator, to see how your balance falls year by year.

Example

A $200,000 home with $40,000 down (20%), at 6% for 30 years. You borrow $160,000 and the payment is $959.28 a month (principal and interest). Over 360 payments you pay $345,341, of which $185,341 is interest. Including the down payment, the home costs you $385,341.

1. P = $200,000 − $40,000 = $160,000
2. i = 6% ÷ 12 = 0.5% per month; n = 30 × 12 = 360
3. Payment = 160,000 × 0.005 ÷ (1 − 1.005^−360) = $959.28
4. Total interest = $959.28 × 360 − $160,000 ≈ $185,341
5. First payment: $800.00 interest and $159.28 principal

Common mistakes

• Calculating the payment on the full home price instead of the loan amount (price minus down payment).
• Forgetting property taxes, homeowners insurance, PMI and HOA dues, which can add a lot to the monthly cost.
• Comparing offers by monthly payment alone: a longer term lowers the payment but raises the total cost.
• Treating an adjustable-rate mortgage (ARM) as fixed: once the rate resets, the payment changes too.
• Ignoring closing costs, which are paid upfront on top of the down payment.