Mortgage Calculator
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A mortgage payment covers principal and interest (P&I), calculated from home price minus down payment, the interest rate, and the loan term. Add property tax, insurance, and PMI to get PITI — your full monthly housing cost. Enter your home price, down payment, rate, and term below for instant monthly payment, total interest, and amortization.
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.
PITI: the full monthly housing cost
This calculator shows P&I — principal and interest only. Your real monthly housing cost is PITI: Principal, Interest, Taxes, Insurance — plus HOA dues and PMI if applicable.
- Property tax (T): typically 0.5–2.5% of home value per year. Add (home value × tax rate ÷ 12) to your P&I.
- Insurance (I): homeowner's insurance averages $1,000–$2,500 per year in the US.
- PMI: required if your down payment is under 20%. Costs 0.3–1.5% of the loan annually until you reach 20% equity.
- HOA: condo and planned-community fees range from $100 to $1,000+ per month.
Rule of thumb: PITI is typically 25–40% higher than the bare P&I shown here. Budget for that gap.
Refinance break-even — when does refi pay off?
Refinancing replaces your current mortgage with a new one, typically at a lower rate. The trade-off: you pay 2–5% of the new loan in closing costs upfront and reset the amortization clock.
Break-even formula: (closing costs) ÷ (monthly P&I savings) = months to break even. If you stay in the house longer than the break-even, refinancing wins. If you sell before, it loses.
Worked example: $400k mortgage, refi from 7% to 6% saves $263 in monthly P&I, closing costs $7,000. Break-even = 7,000 ÷ 263 ≈ 27 months. Plan to stay 3+ years and the refi is worth it.
15-year vs 30-year mortgages side by side
On the same $400k loan at 7%, a 30-year mortgage costs ~$2,661/month and totals $957k over the loan's life. A 15-year at 7% costs ~$3,595/month and totals $647k — saving $310,000 in lifetime interest for $934 more per month.
The math nearly always favours the 15-year if you can afford the payment. Practical wrinkle: a 30-year with voluntary extra payments approximates the 15-year while preserving the optionality to fall back to the lower required payment in a rough year. Most US homeowners default to 30-year for this reason.
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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