Enter your loan amount, interest rate, and term to calculate your monthly mortgage payment and total cost of the loan.
Mortgage Calculator
How the Mortgage Payment Formula Works
A mortgage is a fixed-payment loan where each monthly payment covers both interest and principal. Early payments are mostly interest; later payments are mostly principal. This is called an amortizing loan.
The Formula
M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]
- M = Monthly payment
- P = Principal loan amount
- r = Monthly interest rate (annual rate ÷ 12)
- n = Total number of payments (years × 12)
Example Calculations
| Loan Amount | Rate | Term | Monthly Payment | Total Interest |
|---|---|---|---|---|
| $300,000 | 6.5% | 30 years | $1,896 | $382,633 |
| $300,000 | 6.5% | 15 years | $2,613 | $170,342 |
| $200,000 | 4% | 30 years | $955 | $143,739 |
| $500,000 | 7% | 30 years | $3,327 | $697,544 |
Frequently Asked Questions
Does this calculator include taxes and insurance?
No. This calculator shows the principal and interest (P&I) portion only. Your actual monthly payment will also include property taxes, homeowner’s insurance, and possibly PMI (private mortgage insurance if your down payment is under 20%). These vary by location and lender.
How much does a higher rate cost over the life of the loan?
Significantly. On a $300,000 loan over 30 years, the difference between 6% and 7% is about $195/month and over $70,000 in total interest. Even a 0.5% difference adds tens of thousands of dollars over a 30-year term.
Is a 15-year mortgage better than a 30-year?
A 15-year mortgage saves a large amount of interest (often $100,000–$200,000 on a typical loan) and builds equity faster. However, the monthly payment is significantly higher. A 30-year offers more payment flexibility. The best choice depends on your monthly budget and financial goals.
What is amortization?
Amortization is the process of paying off a loan in regular installments over time. Each payment is the same amount, but the split between interest and principal changes — early payments are mostly interest, while later payments are mostly principal repayment.
How can I pay off my mortgage faster?
Make extra principal payments whenever possible. Even one extra payment per year on a 30-year mortgage can reduce the loan term by 4–6 years and save tens of thousands in interest. Check with your lender that extra payments are applied to principal, not future interest.