Free Mortgage Calculator
Estimate your monthly mortgage payment, total interest, and payoff schedule.
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Inputs
Result
Monthly payment
$2,022.62
Principal + interest
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Short answer
A mortgage payment is the fixed monthly amount that repays a home loan's principal and interest over the loan term. It is computed with the standard amortization formula using loan amount, interest rate, and number of payments.
What is the Mortgage Calculator?
A mortgage is a secured loan used to purchase real estate. The mortgage calculator returns the recurring payment that fully amortizes the loan across the chosen term, along with the interest paid to the lender.
How does the Mortgage Calculator work?
Enter the home price and down payment to determine the financed principal. The annual rate is converted to a monthly rate and the term to a payment count. The amortization formula returns the level payment; multiplying by the payment count returns total cost, and subtracting the principal isolates lifetime interest.
Formula
Variables
MMonthly paymentPLoan principal (price − down payment)rMonthly interest rate (annual rate ÷ 12)nNumber of monthly payments (years × 12)
Explanation
The formula solves for the fixed payment that reduces the principal to zero over n periods when interest compounds monthly at rate r.
Examples
Example 1: $400,000 home, 20% down, 6.5% for 30 years
The financed principal is $320,000. At 6.5% APR the monthly payment lands near $2,022 and the borrower pays roughly $407,908 in interest over the life of the loan.
Example 2: $250,000 home, 10% down, 5.75% for 15 years
A shorter 15-year term with a lower rate yields a higher monthly payment (~$1,868) but slashes lifetime interest to roughly $111,335.
Applications
- Comparing 15-year vs 30-year loan terms
- Testing the payment impact of a larger down payment
- Budgeting for a target monthly housing cost
- Evaluating refinance scenarios at a new interest rate
Advantages
- Instantly quantifies the trade-off between rate, term, and down payment
- Reveals how much of the loan cost is interest vs principal
- Sets a realistic price ceiling before house-hunting
Limitations
- Does not include property taxes, homeowners insurance, PMI, or HOA fees
- Assumes a fixed interest rate for the whole term
- Excludes closing costs and points paid at origination
Common mistakes
- Entering the annual rate as a decimal instead of a percentage
- Forgetting that shorter terms cost less interest but require higher payments
- Ignoring escrowed taxes and insurance when budgeting affordability
Tips
- A 1% rate cut on a $300k, 30-year loan saves roughly $60k in lifetime interest
- Bi-weekly payments effectively add one extra monthly payment per year
- Put at least 20% down to avoid private mortgage insurance
Related concepts
The Mortgage Calculator sits inside the Finance Calculators hub, in the mortgages & home loans cluster. Buying, financing and refinancing property. Understanding the terms below makes the output easier to interpret and easier to compare against neighbouring measures.
Practical use cases and industry applications
Understanding Mortgage
A mortgage is a secured loan used to purchase real estate. The mortgage calculator returns the recurring payment that fully amortizes the loan across the chosen term, along with the interest paid to the lender. Within finance calculators, mortgage belongs to the mortgages & home loans cluster, where it shares terminology and assumptions with closely related tools.
Learning how mortgage is calculated
The formula solves for the fixed payment that reduces the principal to zero over n periods when interest compounds monthly at rate r. Working through the variables one at a time — M, P, r, n — makes the result reproducible by hand and easier to sanity-check.
Using mortgage to make a decision
Comparing 15-year vs 30-year loan terms Testing the payment impact of a larger down payment Budgeting for a target monthly housing cost Because outputs depend on the assumptions you enter, run more than one scenario before committing to a figure.
How mortgage compares with related measures
loan-to-value, escrow, PMI, amortisation schedule all describe adjacent aspects of mortgages & home loans. Comparing this calculator's output against those measures — using the related tools listed on this page — prevents a single metric from being read in isolation.
Frequently asked questions
Does this calculator include taxes and insurance?
No. It returns principal and interest only. Add estimated monthly property tax, homeowners insurance, and PMI separately to get your total PITI payment.
How does the loan term affect total cost?
A longer term reduces the monthly payment but increases total interest because interest accrues on the principal for more months.
What is a good interest rate?
A 'good' rate is relative to the current market. Compare offers from at least three lenders and check the annual percentage rate (APR), which includes fees.
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