Mortgage Calculator

Estimate your monthly house payments and see how much interest you'll pay over the life of your loan.

Loan Details

Monthly P&I payment
$1,516.94
Loan (Principal) $240,000.00
Total of payments $546,098.40
Total interest paid $306,098.40
Principal
Interest

How This Mortgage Calculator Works

Step 1

Determining the Principal

First, we take your Home Price and subtract the Down Payment. The remaining amount is your Principal — the actual amount of money you are borrowing from the bank.

Step 2

Adjusting Interest & Time

The annual interest rate is divided by 12 to get the Monthly Rate. Similarly, the loan term (years) is multiplied by 12 to find the total Number of Payments.

Step 3

The Magic Formula

Using the Amortization Formula, we calculate a fixed monthly payment that ensures the loan is paid off exactly to zero at the end of the term.

The Standard Fixed-Rate Formula

$$M = P \frac{i(1 + i)^n}{(1 + i)^n - 1}$$
M = Monthly Payment P = Principal Loan Amount i = Monthly Interest Rate n = Total Months

💡 Why does this matter?

This calculation shows you the cost of borrowing. In the first few years of a 30-year mortgage, the majority of your payment goes toward Interest, and only a small portion reduces the Principal. Understanding this helps you decide if a shorter term or a larger down payment is right for you.

Mortgage FAQ

1. What exactly is an amortized mortgage?
It's a loan structure where your payment remains fixed, but the ratio of interest vs. principal changes over time. Early on, you pay more interest; later, you pay more principal.
2. Is a 15-year or 30-year mortgage better?
A 30-year term offers lower monthly payments. A 15-year term has higher payments but saves you a massive amount in total interest costs.
3. How much down payment do I need?
20% is the gold standard to avoid PMI, but many programs allow as little as 3% to 3.5% down.
4. Does this include property taxes?
No. This calculator focuses on Principal and Interest (P&I). Real payments usually include taxes and insurance.
5. What is Private Mortgage Insurance (PMI)?
A fee lenders charge if your down payment is under 20%. It protects the lender if you default on the loan.
6. Can I pay off my mortgage early?
Yes! Making extra principal payments can shave years off your mortgage and save you thousands in interest.
7. How does my credit score affect the rate?
Higher scores qualify for lower interest rates. Even a 1% difference in rate can cost you $50,000+ over 30 years.
8. What is the difference between Rate and APR?
The rate is the base cost of borrowing. APR (Annual Percentage Rate) includes the rate plus lender fees and points.