Mortgage Calculator

Monthly payment = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (years × 12). This formula gives the fixed payment needed to fully pay off the loan.

This calculator shows principal and interest only (P&I). Your actual monthly payment may also include property taxes, homeowners insurance, and PMI (private mortgage insurance if your down payment is under 20%). Add roughly $200–$600/month for taxes and insurance depending on your location.

A 15-year mortgage saves significantly on total interest (often 50–60% less) and builds equity faster, but monthly payments are 30–40% higher. A 30-year mortgage has lower monthly payments and more cash flow flexibility. Most financial advisors suggest the 30-year if the payment difference is invested in a retirement account.

The standard recommendation is 20% to avoid PMI (private mortgage insurance). However, many loans allow 3–5% down — FHA loans require as little as 3.5%. A higher down payment means a smaller loan, lower monthly payments, and less total interest paid.

Amortization is the process of paying off a loan through regular payments over time. In a mortgage, early payments are mostly interest, and later payments are mostly principal. The full amortization schedule shows exactly how much of each payment goes to interest vs. principal over the life of the loan.

Even a 1% difference in rate has a large impact. On a $400,000 30-year mortgage, a rate of 6% gives a monthly payment of ~$2,398; at 7% it's ~$2,661 — a difference of $263/month or $94,680 over 30 years.