Mortgage Calculator
Calculate monthly payments, total interest, and view amortization schedule.
Monthly payment
$1,516.96
- Loan amount$240,000.00
- Total interest$306,106.77
- Total paid$546,106.77
This mortgage calculator estimates the monthly principal-and-interest payment on a fully amortizing home loan from four numbers: purchase price, down payment, interest rate, and term. It also shows the amortization schedule, the total interest over the life of the loan, and what an extra principal payment saves.
The payment is the easy part. The number that surprises people is total interest — on a $240,000 loan at 6.5% over 30 years it exceeds the amount borrowed. Below are the formula, the inputs that actually move the payment, and what this estimate leaves out.
How to calculate a mortgage payment
- Loan amount = price − down payment. A $300,000 house with 20% down borrows $240,000.
- Monthly rate = annual rate / 12 / 100. At 6.5%, r = 0.005417.
- Number of payments = term × 12. Thirty years is 360.
- Payment = P × r(1+r)^n / ((1+r)^n − 1) = 240,000 × 0.005417 × 6.99 / 5.99 ≈ $1,517.
Example
A $300,000 home with $60,000 down at 6.5% for 30 years: payment $1,517, total paid $546,000, total interest $306,000. Stretch the same loan over 15 years and the payment rises to about $2,091 while total interest falls to roughly $136,000.
Mortgage payment formula
M = P × r(1+r)^n / ((1+r)^n − 1), with P = principal, r = monthly rate, n = number of months. Total interest = M × n − P.
How to use this calculator
- Enter the purchase price and the down payment in dollars; the loan amount updates underneath.
- Set the interest rate as an annual percentage and the term in years.
- Add an optional extra monthly principal to see the months and interest it saves.
- Open the amortization table to check any single month's split between interest and principal.
What a mortgage payment is made of
Principal and interest are the only two parts this page calculates. A real payment usually adds property tax, homeowner's insurance, and — below 20% down — mortgage insurance, which is why the figure here is a floor rather than a quote. On a $300,000 home, tax at 1.2% adds $300 a month and insurance at 0.5% adds $125.
Fixed vs. adjustable rate
A fixed rate locks the interest for the whole term: the payment never changes, and the risk is that rates fall after you sign. An adjustable rate starts lower and then resets on a schedule — typically after 5, 7, or 10 years — against a benchmark plus a margin. The initial saving is real, but the payment after the first reset is unknown, so compare the fully indexed rate rather than the teaser.
15-year vs. 30-year
The 30-year payment is lower and the total interest is much higher. On $240,000 at 6.5%, the 15-year costs about $574 more per month and saves roughly $170,000 in interest. The trade-off is liquidity: the 30-year keeps the difference in your pocket, which beats the saved interest only if you actually invest it.
What extra principal does
Extra principal goes straight to the balance, so it removes every future interest charge on that amount. An extra $200 a month on the loan above pays it off about 4.5 years early and saves roughly $60,000 — a return equal to the mortgage rate, risk-free and tax-free. Because the scheduled payment does not change, the benefit appears as a shorter term rather than a smaller cheque.
What this calculator leaves out
Closing costs, typically 2–5% of the price, plus prepaid interest, escrow deposits, HOA dues, PMI, and lender fees are not in the payment. Nor is the mortgage interest deduction, which changes the after-tax cost for some borrowers. Treat the result as a screening estimate and compare it against a Loan Estimate from an actual lender.
Common mistakes
- Quoting principal and interest as the monthly cost. Taxes and insurance commonly add 25–35%.
- Comparing a 30-year payment with a 15-year payment without comparing total interest. The shorter loan wins on cost, the longer one wins on flexibility.
- Assuming the rate is the only lever. On a $240,000 loan, one point of rate is about $150 a month; $20,000 more down is about $126.
FAQ
How is a monthly mortgage payment calculated?
Payment = P × r(1+r)^n / ((1+r)^n − 1), where P is the loan amount, r the monthly rate (annual / 12), and n the number of payments. Taxes and insurance are added on top.
How much house can I afford?
A common starting point is a housing payment at or below 28% of gross monthly income, with total debt at or below 36%. On $7,000 gross that is about $1,960 for housing. Lenders also weigh credit and cash reserves.
Does a bigger down payment lower the monthly payment?
Yes, dollar for dollar on principal. On a $240,000 loan, $20,000 more down cuts the payment about $126 at 6.5%. Below 20% down you also pay mortgage insurance, which raises it again.
What is amortization?
The schedule that splits each payment into interest and principal. Early payments are mostly interest; on a 30-year loan the crossover to mostly principal arrives around the midpoint of the term.
Do extra payments reduce the term or the payment?
The term, on a fixed-rate loan. The scheduled payment stays the same and the balance falls faster. Some lenders will re-amortize on request; most do not by default.
Is a 15-year mortgage always cheaper?
Cheaper in total interest, more expensive per month. Whether it is better depends on what you would do with the difference. At 6.5%, paying down the mortgage is a guaranteed 6.5% return before tax.
What is PITI?
Principal, interest, taxes, and insurance — the four parts of a real monthly housing payment. This calculator covers principal and interest; add the other two for the number you will actually pay.
How much does 1% of interest rate matter?
On a $240,000 30-year loan, about $150 a month and roughly $55,000 over the life of the loan.