Mortgage Calculator
Calculate your monthly mortgage payment, total interest, and see the full amortization schedule.
| Year | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
Frequently Asked Questions
A monthly mortgage payment is calculated using the amortization formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments.
For example, a $300,000 loan at 7% annual interest for 30 years gives a principal + interest payment of approximately $1,996/month. Property taxes, insurance, and HOA fees are added on top.
A total monthly mortgage payment typically includes four components (PITI):
Principal — the portion that reduces your loan balance. Interest — the cost of borrowing. Property Taxes — often collected and escrowed by the lender. Insurance — homeowners insurance, plus PMI (Private Mortgage Insurance) if your down payment is less than 20%.
HOA fees, if applicable, are an additional monthly expense.
The 28/36 rule is a widely used guideline for mortgage affordability:
28% — Your monthly housing costs (mortgage payment, property taxes, insurance) should not exceed 28% of your gross monthly income.
36% — Your total monthly debt payments (housing + car loans + student loans + credit cards) should not exceed 36% of gross monthly income.
Many lenders use this rule when evaluating loan applications.
A larger down payment has several benefits: it reduces your loan amount (lower monthly payments), reduces total interest paid, and eliminates PMI if you put down 20% or more.
PMI (Private Mortgage Insurance) typically costs 0.5%–1.5% of the loan amount per year — on a $300,000 loan that's $1,500–$4,500/year. You can request PMI removal once your equity reaches 20%.
A larger down payment may also help you qualify for a lower interest rate.
15-year mortgage: Lower interest rate, far less total interest paid, but higher monthly payments (typically 40–50% more than a 30-year). Best if you can comfortably afford the higher payment and want to build equity faster.
30-year mortgage: Lower monthly payments, more cash flow flexibility, but significantly more total interest. Best if you value cash flow or plan to invest the difference.
Use this calculator to compare both scenarios by adjusting the loan term.