Mortgage calculator
Your monthly mortgage payment is calculated with M = P × r × (1+r)n / ((1+r)n - 1), where P is the loan amount, r is the monthly interest rate, and n is the number of monthly payments. On a $400,000 home with 20% down, a 6.5% rate, and a 30-year term, that is a $2,023 a month principal-and-interest payment, or $2,303 a month once property tax is folded in. Enter your own numbers in the calculator below for your payment, amortization, and how much extra principal payments would save.
Calculate your mortgage payment
defaults to the national median effective rate (0.84% of price); see property tax by county for your area
enter your quote; premiums vary too much by region and coverage to default
only applies below 20% down; typically 0.5% to 1.5% a year
| Down payment | $80,000 |
|---|---|
| Loan amount | $320,000 |
| Principal & interest | $2,023 |
| Property tax / month | $280 |
| Home insurance / month | $0 |
| HOA / month | $0 |
| PMI / month | $0 |
| Total monthly payment (PITI) | $2,303 |
| Total interest over the loan | $408,142 |
| Total paid (principal + interest) | $728,142 |
| New payoff time | 23 years, 5 months |
|---|---|
| Time saved | 6 years, 7 months |
| Interest saved | $105,429 |
| New total interest | $302,714 |
Formula: standard fixed-rate amortization, M = P × r × (1+r)n / ((1+r)n - 1). Property tax default: national median effective rate, U.S. Census Bureau, American Community Survey 5-year estimates. This is an estimate; your actual rate, tax, insurance, and closing terms depend on your lender, county, and insurer.
What makes up a mortgage payment (PITI)?
A mortgage payment usually bundles four things, the acronym is PITI: principal (the part that pays down the loan balance), interest (the lender's charge for the loan), taxes (your share of property tax, usually collected monthly and held in escrow), and insurance (your homeowners policy, also often escrowed). Only principal and interest come from the loan math itself; taxes and insurance are set by your county and your insurer, and can change from year to year even if your rate never does. A loan with a low principal-and-interest payment can still carry a high total PITI in a high-tax county or a high-premium region.
How is the monthly mortgage payment calculated?
The principal-and-interest payment on a fixed-rate loan is M = P × r × (1+r)n / ((1+r)n - 1). P is the loan amount (home price minus down payment), r is the interest rate divided by 12 (the monthly rate), and n is the total number of monthly payments (loan term in years times 12). This formula is why a small change in the interest rate moves the payment more than most people expect: the rate compounds every month for the life of the loan, not just once a year.
On the default example above, a $400,000 home with $80,000 down (20%) leaves a $320,000 loan. At 6.5% over 30 years, that formula gives a principal-and-interest payment of $2,023 a month.
How does amortization front-load interest?
Every payment splits between interest and principal, but the split is not constant. Interest is charged only on the balance still owed, so early in the loan, when the balance is largest, most of each payment goes to interest. As the balance shrinks, the interest charge shrinks with it, and more of the same fixed payment goes to principal instead. On the $320,000 example loan, the very first payment is about $1,733.333 in interest alone, out of a $2,023 payment, meaning less than a third of that first check reduces the balance. That ratio flips only gradually; it takes years before principal overtakes interest in a typical 30-year payment.
Over the full 30-year term of the example loan, the borrower pays $408,142 in interest, on top of the $320,000 borrowed, for a total of $728,142 paid. That is the direct consequence of front-loaded interest: the longer the balance stays high, the more total interest accrues, which is also why the term length matters as much as the rate.
How much does an extra principal payment save?
Money applied directly to principal, on top of the required payment, immediately shrinks the balance interest is calculated on for every month afterward. Because interest is front-loaded, extra principal paid early in the loan avoids the most interest, but even a modest extra payment adds up over the life of the loan. On the example loan, an extra $200 a month applied to principal pays the loan off 6 years and 7 months early (in 23 years, 5 months instead of the full 30) and saves $105,429 in interest, cutting total interest from $408,142 to $302,714.
The calculator finds this by simulating the loan month by month: each month it charges interest on the remaining balance, then applies the regular payment plus the extra amount to principal, and counts how many months it takes to reach zero. That is the only reliable way to get an exact payoff date and interest total once extra payments change the schedule, since the standard payment formula assumes a fixed payment for a fixed number of months.
What is PMI, and when does it drop off?
Private mortgage insurance (PMI) protects the lender, not the borrower, and it is typically required on a conventional loan when the down payment is below 20% of the home's value. PMI is usually billed as a percentage of the loan balance per year, commonly in the 0.5% to 1.5% range, split into a monthly amount added to the mortgage payment. The example above uses a 20% down payment, which is exactly the threshold where PMI is not normally required; enter a smaller down payment in the calculator to see PMI added to the payment.
Under the federal Homeowners Protection Act, PMI on most conventional loans must be automatically terminated once the balance is first scheduled to reach 78% of the home's original value, as long as payments are current. A borrower can also request cancellation earlier, once the balance reaches 80% of the original value. Extra principal payments reach that 80% or 78% threshold sooner, which is a second way (beyond interest saved) that extra payments pay off for a borrower who started with less than 20% down.
How much does the loan term change the payment and total interest?
A shorter term raises the monthly principal-and-interest payment but sharply cuts total interest, because the balance is repaid faster and has less time to accrue interest at all. A longer term lowers the monthly payment but stretches out interest charges for years longer. Use the calculator's term field to compare a 15-year term against the default 30-year term on the same loan amount and rate; the monthly payment will be noticeably higher, but the total interest paid over the life of the loan is typically less than half.
How do I know how much house I can afford?
The payment this calculator produces is only half the affordability question, the other half is whether that payment fits your income and other debt. For the standard lender guardrails (the 28/36 rule) and a calculator that turns those into a price range, see how much house can I afford?. Property tax, one of the four PITI components, is set locally and varies enormously by county; look up your county's typical rate at property tax by county and use it in the tax field above instead of the national median default.
The flat truth: the rate and the term move total interest more than the price does
Home shoppers tend to fixate on the purchase price, but on a 30-year loan, the interest rate and the loan term drive total interest at least as much as the amount borrowed. A one-point difference in rate, or the choice between a 15-year and a 30-year term, can change total interest by tens of thousands of dollars on the same loan amount, often more than a meaningful change in the purchase price would. And extra principal payments, even small, recurring ones, are one of the few levers a borrower controls after closing: they cut interest and payoff time without refinancing, and they build equity faster, which also matters if PMI is in the picture. Run your own numbers above rather than trusting a lender's quoted payment alone; the breakdown shows exactly where every dollar of the payment goes.
Sources
- Fixed-rate amortization formula (standard actuarial formula for a level-payment loan).
- Property tax default (national median effective rate): U.S. Census Bureau, American Community Survey 5-year estimates, tables B25103 and B25077; see property tax by county.
- PMI requirement below 20% down, automatic termination at 78% of original value, and borrower-requested cancellation at 80%: Consumer Financial Protection Bureau, "When can I remove private mortgage insurance (PMI) from my loan?" (Homeowners Protection Act of 1998).