Mortgage Calculator
Calculate your monthly mortgage payment, total interest paid, and full loan breakdown.
The Formula
P = loan amount
r = monthly interest rate
n = number of payments
r = 0.07 / 12 = 0.005833
n = 360 payments
= 320,000 × [0.005833 × (1.005833)³⁶⁰] / [(1.005833)³⁶⁰ − 1]
= $2,129 / month
How to Use This Mortgage Calculator
Enter your home price, down payment amount, interest rate, and loan term to see your estimated monthly payment instantly. The calculator breaks your payment into principal and interest, and shows the total amount you'll pay over the life of the loan u2014 which can be a real eye-opener. A $400,000 home at 7% over 30 years costs nearly $700,000 by the time you're done paying. Knowing that number upfront helps you make a smarter decision before you sign anything.
What Actually Drives Your Monthly Payment
Four things determine your base monthly payment: the loan amount (home price minus down payment), the interest rate, the loan term, and how often interest compounds. On top of that, most lenders roll property taxes and homeowners insurance into your payment through an escrow account, which can add hundreds of dollars a month depending on where you live. Private Mortgage Insurance (PMI) also kicks in if your down payment is under 20% u2014 typically 0.5% to 1.5% of the loan amount per year. So if your calculator shows $1,800/month for principal and interest but your actual payment is $2,300, the difference is almost certainly taxes, insurance, and possibly PMI.
The Real Cost of a Longer Loan Term
A 30-year mortgage has lower monthly payments than a 15-year mortgage, but you pay dramatically more in total interest. On a $350,000 loan at 6.5%, you'd pay roughly $446,000 in interest over 30 years vs. about $196,000 over 15 years. That's a $250,000 difference. The monthly payment on the 15-year would be higher u2014 around $3,050 vs. $2,210 u2014 but if you can swing it, the savings are enormous. A good middle ground many people overlook: take the 30-year mortgage but make one extra principal payment per year. That alone can cut 4u20136 years off the loan and save tens of thousands in interest.
Interest Rate vs. APR: Know the Difference
The interest rate is what the lender charges to borrow money. The APR (Annual Percentage Rate) includes the interest rate plus fees like origination charges, discount points, and other loan costs. Federal law requires lenders to disclose the APR, which makes it easier to compare offers from different lenders on a level playing field. When shopping mortgages, always compare APRs u2014 not just interest rates.
Frequently Asked Questions
What is a good mortgage interest rate?
A good mortgage rate depends on market conditions. As of recent years, rates between 5u20137% are common for 30-year fixed mortgages. Your credit score, down payment, and lender all affect your rate.
How much should I put down on a house?
A 20% down payment avoids Private Mortgage Insurance (PMI). However, many loans allow 3u201310% down. A larger down payment means lower monthly payments and less interest paid overall.
What is the difference between a 15 and 30-year mortgage?
A 15-year mortgage has higher monthly payments but you pay far less total interest. A 30-year mortgage has lower payments but costs significantly more over time.
What is included in a monthly mortgage payment?
At minimum, principal and interest. Most lenders also collect property taxes and homeowners insurance through escrow. If your down payment is below 20%, PMI is typically added. The calculator lets you include taxes and insurance to see your full monthly cost.
Can I pay off my mortgage early?
Most mortgages allow early payoff without penalty. Even one extra payment per year applied to principal can shave years off your loan and save meaningful interest. Check your loan terms for any prepayment penalties before doing so.
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal. APR includes the interest rate plus fees, making it a more complete picture of the loan's true cost. When comparing lenders, APR is the better apples-to-apples number.
What are closing costs and how much should I budget?
Closing costs are fees paid at the time of purchase, typically 2u20135% of the loan amount. They include the appraisal, title insurance, origination fees, and government recording fees. On a $300,000 home, expect $6,000u2013$15,000 on top of your down payment.