How do I calculate my monthly mortgage payment?

Use the formula M = P[r(1+r)^n] / [(1+r)^n − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments (years × 12). Our calculator does this instantly — just enter your home price, down payment, rate, and term.

What is a good mortgage interest rate?

A "good" rate depends on the economic environment, your credit score, loan type, and down payment. Historically, rates between 3–5% are considered low, 6–7% moderate, and above 8% high. Always compare offers from multiple lenders and consider buying down points if you plan to stay in the home long-term.

How much house can I afford?

A common guideline is that your monthly housing payment (principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income. Use our Affordability Calculator to find your maximum home price based on your income, debts, and down payment.

What does principal and interest mean on a mortgage?

Every monthly payment has two components: principal (the portion that reduces your loan balance) and interest (the cost of borrowing). Early payments are mostly interest; later payments shift toward principal. This is called amortization. The total principal paid always equals your original loan amount.

How does loan term affect my mortgage payment?

A longer term (e.g. 30 years) gives you a lower monthly payment but you pay far more total interest over the life of the loan. A shorter term (e.g. 15 years) means a higher monthly payment but you build equity faster and pay significantly less interest. For example, a $320,000 loan at 7% costs ~$2,129/month over 30 years but ~$2,874/month over 15 years — the 15-year option saves roughly $248,000 in interest.

Does this calculator include property taxes and insurance?

No — this calculator shows principal and interest (P&I) only. Your true monthly housing cost will also include property taxes, homeowners insurance, and possibly PMI (if your down payment is below 20%). Add those figures separately; many lenders quote a full PITI payment (Principal, Interest, Taxes, Insurance).

What is amortization?

Amortization is the process of paying off a loan through fixed, regular payments over time. Each payment covers accrued interest first, with the remainder applied to principal. Because the balance decreases each month, the interest portion of each payment shrinks over time and the principal portion grows — even though the total monthly payment stays constant.

Mortgage Calculator

The Mortgage Calculator instantly computes your fixed monthly payment (principal + interest) using the standard amortization formula. Enter your home price, down payment, interest rate, and loan term to see exactly what you will owe each month — plus the full interest cost over the life of the loan. Use it alongside the Affordability Calculator to set a realistic home-buying budget.

Home Price

Down Payment

Loan amount = Home Price − Down Payment

Annual Interest Rate

Loan Term

Monthly Payment

$2,128.97

Total Interest Paid

$446,428.47

Total Cost (Principal + Interest)

$766,428.47

Loan Amount

$320,000.00

How to use this calculator

1
Enter the home price
Type the purchase price of the property you are considering.
2
Enter the down payment
Enter the lump sum you plan to put down. The loan amount is calculated as home price minus down payment.
3
Set the annual interest rate
Enter the annual mortgage interest rate offered by your lender — do not convert it to monthly yourself.
4
Choose the loan term
Select 10, 15, 20, or 30 years. Shorter terms mean higher monthly payments but significantly less total interest.
5
Read your results
The calculator shows your monthly payment, total interest paid over the full term, total cost (principal + interest), and the loan amount.

Formula

M = P × [r(1 + r)^n] / [(1 + r)^n − 1]

Where:
  M = monthly payment
  P = loan principal (home price − down payment)
  r = monthly interest rate (annual rate ÷ 12)
  n = total number of payments (years × 12)

Total Interest = (M × n) − P
Total Cost     = M × n

This is the standard fixed-rate mortgage amortization formula. The monthly rate r is the annual percentage rate divided by 12. For example, a 7% annual rate gives r = 0.07 / 12 ≈ 0.005833. On a $320,000 loan over 30 years (n = 360 payments) at 7%, M = 320,000 × [0.005833 × (1.005833)^360] / [(1.005833)^360 − 1] ≈ $2,129. Total interest paid over 30 years would be roughly $446,000.

Worked Example

Home Price: $400,000 Down Payment: $80,000 (20%) Loan Amount: $320,000 Interest Rate: 7.00% per year Loan Term: 30 years (360 payments) Monthly rate r = 0.07 ÷ 12 = 0.005833 Payments n = 30 × 12 = 360 M = 320,000 × [0.005833 × (1.005833)^360] / [(1.005833)^360 − 1] ≈ $2,129 per month Total paid = $2,129 × 360 = $766,440 Total interest = $766,440 − $320,000 = $446,440 Over 30 years you would pay $446,440 in interest alone — nearly 1.4× the original loan amount. Choosing a 15-year term at the same rate would cut total interest to roughly $198,000.

Frequently Asked Questions

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