Mortgage Calculator
Calculate your monthly mortgage payment, total interest, and see a complete amortization schedule. Plan your home purchase with confidence.
Mortgage Formulas
Monthly Payment
Total Interest
Principal Balance
Loan Term
Understanding Your Mortgage Payment
A mortgage is typically the largest financial commitment you'll ever make. Understanding exactly what you'll pay each month—and over the life of the loan—is essential for making a smart home buying decision.
Your total monthly housing payment consists of several components, often called PITI (Principal, Interest, Taxes, Insurance). Our calculator breaks down each element so you know exactly where your money goes.
Complete Payment View
See principal, interest, taxes, insurance, and PMI all in one place.
Compare Terms
See how 15-year vs 30-year terms affect your payment and interest.
Extra Payment Impact
Discover how extra payments reduce interest and payoff time.
Amortization Schedule
See how each payment is split between principal and interest.
Mortgage Payment Components
Each component of your monthly payment serves a different purpose. Understanding them helps you budget accurately and identify potential savings.
Principal
The portion of your payment that reduces your loan balance. Early in the loan, this is small but grows over time. By paying extra toward principal, you can significantly reduce total interest and shorten your loan term.
Interest
The cost of borrowing money, calculated on your remaining balance. In early years, most of your payment goes to interest. On a $300,000 30-year loan at 6.5%, you'll pay nearly $400,000 in interest over the life of the loan.
Property Taxes
Annual taxes based on your home's assessed value. Rates vary widely by location (0.5% to 2.5%+ of home value). Often collected monthly by the lender and held in escrow.
Homeowner's Insurance
Required by lenders to protect the property. Costs vary by location, home value, and coverage. Typically $1,000-$3,000 annually. Shop around—rates vary significantly between insurers.
PMI (Private Mortgage Insurance)
Required when down payment is less than 20%. Typically 0.5% to 1% of loan value annually. Can be removed once you reach 20% equity. Ways to avoid: 20% down, piggyback loans, or lender-paid PMI.
HOA Fees
For condos and some neighborhoods, covers shared amenities and maintenance. Can range from $100 to $1,000+ monthly. Not part of your mortgage but essential for budgeting.
15-Year vs 30-Year Mortgage
Choosing between a 15-year and 30-year mortgage is one of the biggest decisions in home buying. Each has distinct advantages.
| Factor | 15-Year Mortgage | 30-Year Mortgage | Difference |
|---|---|---|---|
| Monthly payment | Higher (~40% more) | Lower | 30-yr more affordable |
| Interest rate | Typically 0.5-0.75% lower | Slightly higher | 15-yr saves on rate |
| Total interest (300K @ 6.5%) | ~$160,000 | ~$383,000 | 15-yr saves $223K |
| Equity building | Faster | Slower | 15-yr builds wealth faster |
| Flexibility | Less (higher payment) | More (lower payment) | 30-yr more flexible |
| Qualification | Harder (higher DTI impact) | Easier | 30-yr qualifies more buyers |
How Extra Payments Save Money
Making extra payments toward your principal is one of the most effective ways to save money on your mortgage and build equity faster.
$100 Extra Monthly
On a $300,000 30-year loan at 6.5%, adding $100/month saves $62,000 in interest and pays off the loan 5 years early.
$250 Extra Monthly
Same loan with $250 extra monthly saves $118,000 in interest and pays off nearly 9 years early.
One Extra Payment Yearly
Making one extra payment per year (or biweekly payments) saves $58,000 and cuts 4+ years off the loan.
Lump Sum Payments
Applying tax refunds or bonuses to principal has dramatic effects, especially early in the loan when interest costs are highest.
Down Payment Considerations
Your down payment affects not just your monthly payment but also your interest rate, PMI requirements, and negotiating power.
20% Down (Traditional)
Avoids PMI entirely. On a $350,000 home, that's $70,000. Results in lower monthly payment and often better interest rates. Shows sellers you're a serious, qualified buyer.
10-19% Down
Requires PMI but keeps more cash available. PMI typically adds $100-$300/month. Can request PMI removal at 20% equity, automatic at 22%.
3-5% Down (FHA/Conventional)
Makes homeownership accessible sooner but comes with higher monthly costs. FHA loans require PMI for the life of the loan. Consider the true long-term cost.
0% Down (VA/USDA)
Available to eligible veterans and rural buyers. No PMI on VA loans. Great option if you qualify, but consider building equity through extra payments.
Tips for Getting the Best Mortgage
Small differences in rate and terms can save tens of thousands of dollars over the life of your loan.
Improve Your Credit Score
A 740+ score gets the best rates. A 100-point improvement can save 0.5%+ on your rate—that's $30,000+ on a typical loan. Pay down credit cards and avoid new credit before applying.
Shop Multiple Lenders
Get quotes from at least 3-5 lenders including banks, credit unions, and mortgage brokers. Rate differences of 0.25% to 0.5% are common and cost thousands over the loan term.
Compare APR, Not Just Rate
APR includes fees and gives a truer cost comparison. A lower rate with high fees may cost more than a slightly higher rate with low fees.
Consider Points
Buying points (prepaid interest) lowers your rate. Each point costs 1% of the loan and typically reduces rate by 0.25%. Worth it if you'll keep the loan 5+ years.
Lock Your Rate
Once you find a good rate, lock it. Rate locks typically last 30-60 days. Rates can change daily, and an unlocked rate isn't guaranteed.
Reduce Debt-to-Income
Lenders prefer DTI under 36%, with housing costs under 28% of gross income. Pay off car loans or credit cards before applying to qualify for more home.
Frequently Asked Questions
How much house can I afford?
A common guideline is that your total housing payment (PITI) shouldn't exceed 28% of your gross monthly income, and total debt payments shouldn't exceed 36%. For a $75,000 income, that's about $1,750/month for housing, suggesting a home price around $250,000-$300,000 depending on your down payment and local taxes.
What is PMI and how do I get rid of it?
PMI (Private Mortgage Insurance) protects the lender if you default. It's required with less than 20% down. You can request removal at 20% equity (based on original value or new appraisal). It's automatically removed at 22% equity. Refinancing is another option once you have sufficient equity.
Should I pay points to lower my rate?
It depends on how long you'll keep the loan. Calculate the breakeven point: if a point costs $3,000 and saves $50/month, you break even in 60 months (5 years). If you plan to stay longer, points make sense. If you might move or refinance sooner, skip them.
What credit score do I need for a mortgage?
Minimum scores: FHA loans typically require 580+ (or 500 with 10% down), conventional loans need 620+, but the best rates require 740+. Each 20-point improvement can save 0.125% to 0.25% on your rate.
Are biweekly payments worth it?
Yes! By paying half your monthly payment every two weeks, you make 26 half-payments (13 full payments) instead of 12. This extra payment goes to principal, saving thousands in interest and paying off a 30-year loan about 4 years early.
Should I get a fixed or adjustable rate mortgage?
Fixed rates offer predictability—your payment never changes. Adjustable rates (ARMs) start lower but can increase. ARMs make sense if you'll sell or refinance before the rate adjusts (typically 5-7 years). In a rising rate environment, fixed rates offer protection.
How does property tax affect my payment?
Property taxes are typically 0.5% to 2.5% of your home's value annually. On a $350,000 home at 1.2%, that's $4,200/year or $350/month added to your mortgage payment. Taxes vary widely by location and can change over time.
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