Mortgage Calculator

1. Enter the Home Price. Use the full purchase price, not the loan amount. The calculator subtracts your down payment automatically.
2. Set your Down Payment as a percentage (e.g., 20%) or a dollar amount (e.g., $80,000). Putting down less than 20% triggers PMI, which this calculator factors in.
3. Enter the Loan Term and Interest Rate. Most buyers use 30 years. Use your note rate from the lender, not the APR. The APR includes fees and will give you an inflated payment.
4. Set the Start Date to see your exact payoff date and a month-by-month amortization schedule.
5. Check "Include Taxes and Costs" to add property taxes (national average is about 1.1%), homeowner's insurance, PMI if applicable, and HOA fees. This gives you your true monthly housing payment.
6. Use More Options to model extra payments. Adding $200 a month to a $400,000 mortgage at 7% saves over $70,000 in interest and pays off the loan 5 years early.
7. Try Biweekly Payments. Paying half your monthly amount every two weeks adds one full extra payment per year, saving significant interest on most loans.

Your monthly principal and interest payment comes from the standard amortization formula. It calculates a fixed payment that covers both interest charges and gradual principal payoff over the life of the loan.

M = P × [r(1+r)^n] / [(1+r)^n - 1]

• M = monthly payment (principal + interest only)
• P = loan principal (home price minus down payment)
• r = monthly interest rate (annual rate divided by 12)
• n = total number of payments (loan term in years × 12)

Worked example: A $320,000 loan at 7% for 30 years. Monthly rate r = 0.07 / 12 = 0.5833%. Total payments n = 360.

Payment = 320,000 × [0.005833 × (1.005833)^360] / [(1.005833)^360 - 1]
       = $2,129/month

Over 30 years, that payment means $446,440 in total interest on top of the $320,000 borrowed. In month 1, only $255 of your $2,129 goes to principal. By month 200, the split is roughly even.

Most lenders use the 28/36 rule to decide how much to lend. Your total housing payment (principal, interest, taxes, insurance) should not exceed 28% of gross monthly income. All debt payments combined should not exceed 36%. These are conventional lending guidelines, not hard laws.

These estimates assume 20% down and typical property tax and insurance. Your actual number depends on your rate, existing debts, and local tax rates. Use our home affordability calculator to get a figure specific to your income and debt load. For the full month-by-month interest breakdown, the amortization calculator shows exactly how each payment splits between principal and interest.