Mortgage Calculator
Calculate your monthly mortgage payment, see how much interest you'll pay, and visualize your amortization schedule.
⚠️ High Interest Rate Warning
At %, you'll pay in interest over the life of this loan. Consider making a larger down payment or choosing a shorter term.
Compare Best Mortgage Rates →Loan Details
Or 20% of home price
Your Results
Monthly Payment (P&I)
$1,996
Loan Amount
$240,000
Total Interest
$478,527
Total Amount Paid
$718,527
Principal vs. Interest
How Mortgages Work in Real Life
When you buy a home, most buyers don't pay the full price upfront. Instead, they borrow money from a bank or lender—a mortgage—and repay it over 15 to 30 years with interest. The monthly payment stays fixed, but how that payment gets split between principal (the loan amount itself) and interest changes dramatically over time.
In the early years of a 30-year mortgage, the majority of your payment goes toward interest. For example, on a $240,000 loan at 7% interest, your first payment breaks down to roughly $1,400 in interest and only $596 in principal reduction. By payment #180 (year 15), the split reverses—more goes to principal than interest. This is why extra payments early on can save you tens of thousands of dollars.
Real example: A couple buys a $350,000 home with a 20% down payment ($70,000) and finances $280,000 at 6.5% for 30 years. Their monthly payment is $1,771. Over 30 years, they pay $637,698 total—including $357,698 in interest alone. If they made one extra principal payment per year, they'd pay off the loan 4 years early and save $62,000 in interest.
💡 Key Insight
Your interest rate isn't the only factor—the size of your down payment and the loan term you choose have an equally massive impact on total cost. A 15-year mortgage at 6% may cost less total interest than a 30-year at 5.5%.
The Mortgage Formula Explained
The monthly mortgage payment is calculated using this standard formula:
Where:
- M = Total monthly payment (principal + interest)
- P = Principal loan amount (home price minus down payment)
- r = Monthly interest rate (annual rate ÷ 12)
- n = Total number of payments (loan term in years × 12)
Example: For a $240,000 loan at 7% annual interest over 30 years: r = 0.07 ÷ 12 = 0.005833, n = 360 payments. Monthly payment = $1,597. Total paid over 30 years = $575,164. Total interest = $335,164.
Note: This excludes property taxes, homeowner's insurance, HOA fees, and PMI—all of which add to your actual monthly housing cost.
How to Use This Mortgage Calculator
Enter the home price
Input the full purchase price of the home you're considering. Check current listings in your target neighborhood for realistic numbers.
Set your down payment
Enter the amount you plan to put down. Putting down less than 20% typically requires Private Mortgage Insurance (PMI), adding $50–$200/month to your costs.
Choose your loan term
15-year mortgages have higher payments but save tens of thousands in interest. 30-year mortgages offer lower payments. Use the reverse mode to find your affordable price range.
Enter current interest rates
Check Bankrate.com or your bank's website for current rates. Even 0.5% difference on a $280,000 loan costs $30,000+ over 30 years.
Review your results
Look at total interest paid—not just monthly payment. Try Reverse Mode to see the maximum home price you can afford based on your budget.
7 Tips to Pay Off Your Mortgage Faster
🏠 Make biweekly payments
Instead of 12 monthly payments, pay half every two weeks. That's 26 half-payments = 13 full payments per year, cutting 4 years off a 30-year mortgage.
💰 Round up payments
Pay $1,600 instead of $1,597. The extra $3/day ($1,095/year) saves tens of thousands over 30 years without feeling it.
📈 Make extra principal payments
Any extra payment directly reduces principal. Even $100/month extra on a $240K loan at 7% saves $35,000+ and cuts 4 years off.
🔄 Refinance strategically
If rates drop 1%+ from your current rate, refinancing can save money. Calculate the break-even point—typically 2-3 years of lower payments.
🏦 Use windfalls wisely
Tax refunds, bonuses, inheritance—put even half toward principal. A $5,000 lump sum on a $240K loan saves ~$12,000 in interest.
⏩ Choose 15-year when possible
If you can afford the higher payment, a 15-year loan at 6% saves $150,000+ in interest compared to 30-year at 7%.
5 Costly Mistakes to Avoid
❌ Only comparing monthly payments
A 30-year mortgage might give you a $200 lower monthly payment, but you'll pay $80,000+ more in total interest. Always compare total cost over the life of the loan.
❌ Ignoring PMI costs
With less than 20% down, you'll pay $100-300/month in Private Mortgage Insurance. On a $300,000 loan, that's $36,000-$108,000 added to your total cost.
❌ Not getting pre-approved first
Shopping for homes without knowing your real budget wastes time and emotional energy. Get pre-approved before house hunting.
❌ Focusing only on the interest rate
A slightly higher rate with no origination fees may be better than 0.25% lower rate with $3,000 in upfront costs. Always calculate the APR.
❌ Not considering total housing costs
Property taxes (1-3%/year), insurance ($1,000-3,000/year), and maintenance (1% of home value/year) add significantly to your monthly budget.
Frequently Asked Questions
How is my monthly mortgage payment calculated?
Your monthly payment uses the formula: M = P[r(1+r)^n]/[(1+r)^n-1], where P is the principal loan amount, r is the monthly interest rate, and n is the number of payments. This gives you P&I only—property taxes and insurance are additional.
Should I choose a 15-year or 30-year mortgage?
A 15-year mortgage has higher monthly payments but you'll pay significantly less interest. A 30-year mortgage has lower payments but costs more over time. If you can comfortably afford the 15-year payment, it's usually the smarter choice.
How much should I put down on a house?
Putting down 20% avoids PMI and typically gets better rates. However, 5-10% down payments are common for first-time buyers. The right amount depends on your savings and financial situation.
What is PMI and when do I stop paying it?
Private Mortgage Insurance is required when your down payment is less than 20%. Once your loan balance drops to 78% of your home's original value, you can request cancellation. This typically happens around year 10-15 of a 30-year mortgage with 10% down.
What credit score do I need for a good mortgage rate?
For the best rates (6-7% on a 30-year fixed), you generally need a credit score of 720+. Scores above 760 often get the most competitive offers. Below 620, you'll still get approved but potentially 1-2% higher—costing $60,000+ more on a $300,000 loan over 30 years.
Is it better to pay points on a mortgage?
Mortgage points let you pay upfront to lower your rate. Each point costs 1% of the loan and reduces the rate by 0.25%. If you'll stay 10+ years, buying points usually pays off. Shorter stays often don't justify the upfront cost.