Mortgage Calculator
Estimate your monthly mortgage payment, total interest, and total cost over the life of the loan.
How Mortgage Payments Work
A mortgage is a loan used to purchase real estate, typically repaid in equal monthly installments over 15 to 30 years. Each payment covers both principal and interest.
The Formula
Monthly payments are calculated using the amortization formula:
M = P × [r(1+r)n] / [(1+r)n − 1]
Where: M = monthly payment, P = principal (loan minus down payment), r = monthly interest rate, n = total number of payments.
Example
| Input | Value |
|---|---|
| Home Price | $300,000 |
| Down Payment | $60,000 |
| Interest Rate | 6.5% |
| Term | 30 years |
Result: Monthly payment of approximately $1,516. Over 30 years you would pay $545,857 total, of which $305,857 is interest.
Increasing your down payment or choosing a shorter term significantly reduces total interest paid.
Frequently Asked Questions
How much should my down payment be?
Traditionally 20% is recommended to avoid private mortgage insurance (PMI). However, many loans allow 3–10% down. A larger down payment reduces your monthly payment and total interest.
Is a 15-year or 30-year mortgage better?
A 15-year mortgage has higher monthly payments but much lower total interest. A 30-year mortgage offers lower monthly payments but costs more over time. Choose based on your budget and financial goals.
Does this calculator include taxes and insurance?
No, this calculates principal and interest only. Your actual monthly payment may also include property taxes, homeowner's insurance, and PMI (PITI).