Mortgage Calculator
Estimate mortgage payment and totals.
A mortgage calculator tells you what your monthly payment will look like before you sign anything. You enter the home price, your down payment, the interest rate and the loan term, and the tool returns a payment figure in seconds. It lets you test different prices, terms and rates side by side. That way you walk into a lender conversation knowing your numbers.
How the Mortgage Calculator Works
The tool applies a standard amortization formula to your inputs. It spreads your loan balance across every monthly payment for the full term. Early payments carry more interest and later payments carry more principal. The mortgage payment calculator shows you both the monthly figure and the total cost over the life of the loan.
You enter the home price and your down payment first. The calculator subtracts the down payment from the price to set your loan amount, and it shows that figure in the results. You then enter the annual interest rate and the loan term in years. The result appears as a monthly payment covering principal and interest.
What You Enter
- Home price
- Your down payment amount
- Annual interest rate from your lender
- Loan term, typically 15, 20 or 30 years
The Mortgage Payment Formula
Where M is the monthly payment, P is the principal, r is the monthly interest rate and n is the total number of payments. The monthly interest rate is your annual rate divided by 12. The total payments are the term in years multiplied by 12.
Worked example
Say you borrow 300,000 at a 7 percent annual rate over 30 years. Your monthly rate is 0.07 divided by 12, which gives 0.00583. Your total payments are 360. The formula returns a monthly payment near 1,996 for principal and interest alone.
Loan Term, PITI and PMI
Private mortgage insurance also enters the picture when your down payment falls below 20 percent of the home price. Lenders add PMI to protect themselves if you default. It typically runs between 0.5 and 1.5 percent of the loan per year. Factor it in from the start so your budget holds.
How Loan Term Affects Your Payment
The loan term changes your payment and your total interest cost in opposite directions. A 30 year term spreads payments thinly and keeps the monthly figure lower. A 15 year term nearly doubles the monthly payment but cuts total interest by a large amount. Run both terms at the same rate and compare.
A borrower taking 300,000 at 7 percent over 30 years pays roughly 419,000 in total interest across the life of the loan. The same borrower on a 15 year term pays closer to 185,000 in total interest. The monthly payment is higher but the long run saving is significant.
Quick Ways to Lower Your Payment
- Increase your down payment to shrink the principal
- Improve your credit score to access a lower interest rate
- Choose a longer term if a lower monthly figure is the priority
- Shop more than one lender and compare rates on the same loan size
Buying a Home vs. Renting
This tool helps you place the cost of owning against the cost of renting. Monthly mortgage payments build equity over time while rent payments do not. Ownership also carries maintenance, tax and insurance costs that renting does not.
The mortgage calculator gives an estimate from your inputs. It is not financial advice and does not cover every lender condition. Speak with a licensed mortgage professional before you commit to a purchase or a loan product.
Frequently asked questions
How does a mortgage calculator work?
It takes your home price minus your down payment as the loan amount, then applies an amortization formula with your rate and term to return a monthly payment.
What is PITI in a mortgage payment?
PITI stands for principal, interest, taxes and insurance, which make up the full monthly housing cost.
How does a 15 year term compare to 30 years?
A 15 year term has higher monthly payments but saves a large amount in total interest.
What is PMI and when do I need it?
PMI is private mortgage insurance, required when your down payment is below 20 percent of the home price.
Is this mortgage payment calculator free?
Yes, it is free and runs in your browser with no sign up needed.
Can I use this as a home loan calculator for any country?
The formula works for any fixed rate mortgage, though local tax and insurance figures will vary.
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