Mortgage Calculator
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Set the home price, down payment, rate, and term. We compute monthly P&I, total interest, and chart how your balance pays down year-by-year.
Monthly Payment
$2,334.95
Principal & interest only
Total Interest
$480,583.13
Total Cost
$930,583.13
Down payment + payments
Loan balance over time
Outstanding principal at the end of each year of the loan.
At-a-glance
Loan amount
$360,000.00
Down payment
$90,000.00 (20%)
Interest rate
6.75%
Term
30 years
What is a mortgage?
A mortgageis a loan secured against the property you're buying. You put down a portion of the price (the down payment), the lender covers the rest, and you repay that balance plus interest in fixed monthly instalments over 15 to 30 years. Until the loan is fully paid, the lender holds a legal claim on the home. If you stop paying, they can foreclose and take it.
A mortgage is the biggest debt most people ever take on, and the longest. That's why every input matters more than it would on a smaller loan. A half-percent change in the rate on a 30-year $400,000 loan moves total interest by roughly $50,000. The three decisions that really matter: term vs rate, fixed vs adjustable, and the size of your down payment. Those three drive what the house actually costs you over your life.
How to calculate a mortgage payment manually
A fixed-rate mortgage uses the same amortising-loan formula as any EMI. With principal P (home price minus down payment), monthly rate r (annual rate / 12), and tenure n in months:
Worked example: a $450,000 home with $90,000 down at 6.75% for 30 years. Loan principal P = 360,000. Monthly rate r = 0.0675 ÷ 12 = 0.005625. Tenure n = 360. Plug it in: M = 360,000 × 0.005625 × (1.005625)360 ÷ ((1.005625)360 − 1) ≈ $2,335 per month in principal and interest. Over 30 years that's about $840,000 paid in total. Roughly $480,000 of that is interest. Property tax, insurance, and HOA fees come on top.
Real-world examples
Starter home, 30-year
$300k home · 10% down · 6.5% · 30y
P&I ≈ $1,706 · Interest ≈ $343,500
Low down payment, long term. The monthly stays affordable, but interest ends up being the bulk of what you pay.
Move-up home, 15-year
$600k home · 20% down · 6.25% · 15y
P&I ≈ $4,114 · Interest ≈ $260,500
Bigger monthly bill, but the 15-year term saves hundreds of thousands in lifetime interest.
Refinance scenario
$400k loan · 5.5% vs 7% · 25y left
Save ≈ $371/mo · Lifetime ≈ $111,300
Same principal, same remaining term. A 1.5% rate drop saves more than three years of payments over the life of the loan.
Common mistakes when budgeting for a mortgage
- Mixing up P&I with PITI. Principal & Interest is what the formula gives you. Your real monthly housing cost also includes property tax, homeowner's insurance, and sometimes PMI or HOA fees. PITI is often 20–30% higher than P&I in the US.
- Ignoring closing costs. Origination, appraisal, title insurance, and transfer taxes usually add 2–5% of the loan amount upfront. On a $400,000 loan that's $8,000 to $20,000 you need in cash on top of the down payment.
- Stretching to the maximum approval. Banks approve you for the largest payment your income can service. That's not the same as the largest payment you should take. Aim for total housing cost under 28% of gross monthly income.
- Underestimating the term-vs-rate trade. A 30-year mortgage has a lower payment but pays the bank far more than a 15-year. If you can manage the higher monthly, a 15-year often costs less than half the lifetime interest.
- Forgetting that ARMs reset. A 5/1 ARM holds its teaser rate for 5 years, then adjusts annually. If rates climb 3% by year 6, your payment can jump by hundreds of dollars overnight. This calculator only models fixed-rate mortgages.
Frequently asked questions
- No. The result is principal and interest only — what's commonly called P&I. Your true monthly housing cost (PITI) also includes property tax, homeowner's insurance, and possibly HOA fees and PMI.
- 20% is the common rule of thumb because it lets you skip private mortgage insurance (PMI) on US conventional loans. Smaller down payments are possible but typically come with PMI and higher rates.
- Fixed-rate. The interest rate stays the same for the entire term. ARMs (adjustable-rate mortgages) reset periodically and would require a different model.
- Mortgages are front-loaded with interest because interest accrues on the outstanding principal, which is highest at the start. Watch the balance chart — the curve flattens slowly for the first decade and accelerates downward in the second half.
- Often yes. An extra payment goes 100% to principal, which knocks out the interest that principal would have earned over the rest of the loan. Even one extra payment per year typically shaves 4–5 years off a 30-year mortgage.
- A common guideline is the 28/36 rule: total housing costs (PITI) under 28% of gross monthly income, and total debt payments under 36%. Lenders may approve well above that, but those approvals often leave you 'house poor' — technically able to pay but with no margin for anything else.
- Mathematically, it depends on the spread between your mortgage rate and your expected investment return after taxes. At today's rates (6–7%), keeping cash invested rarely beats putting more down, because you're paying guaranteed 7% interest to earn an uncertain 8%. Also: 20% down removes PMI, which is a hard saving.
- At closing, the buyer's funds first pay off your remaining mortgage balance — whatever's left is yours. If you sell early in the loan's life, most of your previous payments went to interest rather than equity, so the cash you walk away with is often less than you'd expect.
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