How to Use This Mortgage Calculator
Enter the details below to estimate your monthly payment and see your full schedule:
- Price of HomeThe full price of the property you want to buy or are thinking about buying.
- The First PaymentThe amount you will pay up front. A 20% down payment on a standard loan gets rid of PMI.
- Length of LoanPick 15, 20, or 30 years. Shorter terms involve greater payments, but they can save a lot of money on interest.
- Rate of InterestThe interest rate on your mortgage for the year. Check with Freddie Mac or your lender to see what the current rates are.
- Taxes on PropertyProperty taxes are usually 1.1% of the value of the residence each year.
- Insurance for homeownersThe yearly cost of insurance, which is usually between $1,800 and $2,400 for most properties.
- PMIIf your down payment is less than 20%, you need private mortgage insurance.
- Fees for the HOAMonthly dues for the homeowners association, if there is one.
Understanding your results
Your results highlight the breakdown of your payment and your full payoff plan:
The full PITI calculation that lenders employ shows you exactly how your payment is split between principal, interest, taxes, insurance, and PMI.
See tables for each month that show how each payment lowers your balance. Keep track of when you'll reach 20% equity so you can get rid of PMI.
What is a mortgage and how does it work?
A mortgage is a loan that lets you buy real estate. The property itself is used as collateral. You take out a loan from a lender and pay it back over a defined period of time (usually 15 or 30 years). The lender has a lien on your house until the loan is paid off.
Each monthly payment includes four parts, which are called PITI: Principal (which lowers your loan balance), Interest (the cost of borrowing), Taxes (property taxes kept in escrow), and Insurance (homeowners coverage plus mortgage insurance if you need it). Most lenders ask for all four in one monthly payment and then take care of your tax and insurance payments for you through an escrow account.
Because of how the payments are set up, you'll largely pay interest in the first several years. With a normal 30-year mortgage, your first payment might go 75% to interest and only 25% to the principle. Over time, this ratio slowly changes through a process called amortization.
How to figure out your mortgage payment
M = P x [r(1+r)^n] / [(1+r)^n - 1] is the formula.
M = P x [r(1+r)^n] / [(1+r)^n - 1]
Example of a step-by-step calculation
Let's figure out how much the monthly payment will be on a 30-year, $350,000 loan with a 6.5% interest rate:
- Step 1: Change the rate: 6.5% / 12 = 0.5417% = 0.005417
- Step 2: The total number of payments is 30 years times 12 months, which is 360 payments.
- Step 3: Use the formula:
- (1 + 0.005417)^360 = 6.9915
- 0.005417 times 6.9915 equals 0.03787
- 6.9915 - 1 = 5.9915
- 0.03787 divided by 5.9915 equals 0.006321
- $350,000 times 0.006321 equals $2,212.35
The result is that your monthly payment of principal and interest would be $2,212. The total is about $2,850/month when you include in property taxes (about $320/month), insurance (about $175/month), and PMI (about $145/month).
This example shows why our integrated amortization schedule is important: after 30 years, you'd pay $446,446 in interest on top of your $350,000 principal, which is more than double what you would have paid.
Choosing between mortgages with 15 and 30 years of payments
The length of your loan has a big effect on both your monthly payment and the total amount of interest you pay. Here's how the identical loan of $300,000 with 6.5% interest compares:
| Factor | 15-Year Term | 30-Year Term |
|---|---|---|
| Monthly Payment | $2,613 | $1,896 |
| Total Interest Paid | $170,340 | $382,560 |
| Savings on interest | $212,220 | $0 |
| Typical Interest Rate | about 5.75% | about 6.5% |
You can easily afford bigger payments, want to create equity faster, and want to save money for the long term. Great for refinancing, buying a second property, or someone with a lot of money.
You need to be able to make payments when you want to, want to cut your monthly payments, or want to invest the difference in something else. You can always pay more to pay off faster without having to pay the higher minimum.
Knowing your loan options
Here are the most common mortgage types and what they require:
Ways to lower your monthly payment
Here are a few ways to lower what you pay each month:
- 1Put more money downLower the loan amount and maybe get rid of PMI. If you put down 10% instead of 5% on a $400,000 property, you'll save about $125 a month.
- 2Look for better interest ratesA 0.25% difference on a $300,000 loan means about $45 a month and $16,200 over 30 years.
- 3Buy points at a discountOne point costs 1% of your loan amount and usually lowers your rate by 0.25%.
- 4Think of an ARMA 5/1 ARM has a fixed rate for five years, after which it changes every year. Initial rates are 0.5% to 1% cheaper than fixed rates for 30 years.
Mistakes people make with mortgages
Before you start looking for a house, get pre-approved to make sure your budget is correct and your offers are stronger.
Don't just think about the principal and interest. Taxes and insurance might cost $400 to $800 a month.
Set aside money for closing charges, moving costs, and repairs. Don't spend all of your money on a down payment.
Getting a loan for a car or opening credit cards can stop you from getting approved or affect your rate.
Don't only look at the offered rate; also look at the APR (including costs) and how quickly the lender responds.
The current rate of US mortgage
The Federal Reserve's policies, inflation, bond markets, and the state of the economy all affect mortgage rates. As of late 2024 to early 2025, the following rates are common:
Rates depend on the type of loan, the credit score, the down payment, and the lender. The Primary Mortgage Market Survey from Freddie Mac has the most up-to-date rates.
Questions that are often asked
What is the formula for finding out how much I owe each month on my mortgage?
To figure out your monthly mortgage payment, use the formula M = P x [r(1+r)^n] / [(1+r)^n - 1]. In this formula, P is the loan amount, r is your monthly interest rate (annual rate divided by 12), and n is the total number of installments. If you took out a $300,000 loan at 6.5% for 30 years, your monthly payment for the principal and interest would be about $1,896. Include property taxes, insurance, and PMI in your total payment.
What does a mortgage payment (PITI) cover?
A full mortgage payment includes PITI: Principal (the amount that lowers your loan balance), Interest (the cost of borrowing), Taxes (property taxes that are usually paid monthly in escrow), and Insurance (homeowners insurance and mortgage insurance if you have it). There may also be HOA costs. Our calculator has all of these parts so that it can give you an exact estimate of your total monthly payment.
With my wage, how much house can I afford?
Follow the 28/36 rule: Don't spend more than 28% of your gross monthly income on housing costs and 36% on all of your debt. If you make $6,000 a month, try to keep your housing costs below $1,680 a month. When deciding how much money you can borrow, lenders also look at your credit score, debt-to-income ratio, and down payment amount.
What is PMI and when do you need it?
If your down payment is less than 20%, you need Private Mortgage Insurance (PMI) on a regular loan. PMI costs between 0.46% and 1.5% of the original loan amount per year ($115 to $375 a month on a $300,000 loan). You can ask for PMI to be canceled when your loan-to-value ratio (LTV) hits 80%. It will also be canceled automatically at 78% LTV.
How do APR and interest rates differ?
The interest rate is the amount of money you have to pay back on the loan. APR, or Annual Percentage Rate, is the interest rate plus other charges of the loan, such as origination fees, discount points, and mortgage insurance, all stated as an annual rate. APR gives a better overall picture of the total cost of borrowing and is usually greater than the interest rate.
Should I get a mortgage for 15 or 30 years?
A 15-year mortgage has lower interest rates (usually 0.5-0.75% lower) and saves a lot of money on interest, but the monthly payments are greater. A 30-year mortgage has lower monthly payments and more options, but it costs a lot more in total interest. If you take out a $300,000 loan for 30 years instead of 15 years, you could pay $150,000 extra in interest.
What is an amortization schedule and how does it work?
An amortization schedule illustrates how much of each payment goes toward the loan's principal and how much goes toward the interest. Most of the time, early payments are only interest. For example, on a 30-year loan, your first payment might be 75% interest. As you pay off the principal, more of each payment goes toward the balance. Our calculator gives you a full amortization schedule right away, along with an estimate of your payment.
How high does my credit score have to be to buy a house?
The minimum credit score needed for a loan depends on the type of loan. For example, conventional loans usually require a score of 620 or higher, FHA loans require a score of 580 (or 500 with 10% down), VA loans don't have a minimum but lenders often want a score of 620 or higher, and USDA loans usually require a score of 640. People with higher credit scores can get better interest rates. A score of 740 or higher usually gets the best prices.
What are closing charges, and how much should I anticipate to pay?
Closing charges usually make about 2% to 5% of the amount of your mortgage. You should anticipate to pay between $6,000 and $15,000 on a $300,000 loan. These costs include fees for starting a loan, getting an appraisal, title insurance, an attorney, paying taxes and insurance in advance, and recording fees. Some lenders let you avoid closing costs by adding them to your loan or interest rate.
How long do I have to pay PMI on my mortgage?
You can ask for PMI to be removed if your loan-to-value (LTV) ratio reaches 80% through payments or appreciation. The original amortization plan says that PMI ends automatically when LTV reaches 78%. The regulations for removing MIP on FHA loans are different. Loans made after June 2013 need MIP for the life of the loan unless you put down 10% or more (then 11 years).
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Important disclaimers
Last updated: January 4, 2026
This calculator is only for informational reasons and does not give financial advice. Your credit score, the lender's requirements, and the state of the market will all affect the actual payments, rates, and terms of your mortgage. Before you make any decisions about how to finance your house, you should always talk to licensed mortgage professionals and financial advisors.
The mortgage rates, loan limits, and program conditions mentioned are up to date as of the time of writing, but they change often. Check with lenders and official sources like the Consumer Financial Protection Bureau (CFPB) at consumerfinance.gov and the Federal Housing Finance Agency (FHFA) at fhfa.gov to be sure you know the current rates and eligibility conditions.