How to Use the Mortgage Calculator
Enter the home price, down payment, interest rate, and loan term to estimate your monthly mortgage payment. You can then add property taxes, homeowners insurance, PMI, and HOA fees to make the estimate more closely reflect your expected monthly housing costs.
Use the Closing costs & discount points section to estimate upfront costs or model closing costs added to the loan. If you want to see how additional principal payments could affect the loan, open Optional: Make extra payments and enter a monthly, annual, or one-time amount.
After entering your assumptions, review the Payment Breakdown tab to see how the monthly estimate is divided among principal, interest, taxes, insurance, PMI, HOA fees, and extra principal. Switch to Amortization to review the projected loan balance, equity, total interest, payoff date, and repayment schedule over time.
What Is Included in Your Monthly Mortgage Payment?
A monthly mortgage payment can include more than the amount needed to repay the loan. Principal and interest make up the basic mortgage payment, while property taxes, homeowners insurance, private mortgage insurance (PMI), and homeowners association (HOA) fees can increase your total monthly housing cost. Principal, interest, taxes, and insurance are often collectively referred to as PITI.
Principal and Interest
Principal is the portion of your payment that reduces the amount you owe on the mortgage. Interest is the cost of borrowing money from the lender. Your monthly principal-and-interest payment is primarily determined by the amount borrowed, interest rate, and loan term.
With a typical fixed-rate mortgage, the principal-and-interest payment remains the same throughout the scheduled loan term, although the amount applied to principal and interest changes over time.
Property Taxes and Homeowners Insurance
Property taxes and homeowners insurance are separate from principal and interest but are commonly included when estimating the total monthly mortgage payment. When these expenses are paid through an escrow account, the mortgage servicer collects part of the estimated annual cost with each monthly payment and pays the bills when they are due.
Actual property taxes and insurance premiums vary by property and location, so entering estimates that reflect the home you are considering will provide a more useful monthly payment estimate.
PMI and HOA Fees
Private mortgage insurance (PMI) may be required on some conventional mortgages when the borrower makes a smaller down payment. PMI protects the lender rather than the borrower and adds to the monthly cost while it applies.
HOA fees may also affect your monthly housing expenses if the property belongs to a homeowners association. HOA dues are not part of the mortgage itself, but including them in the calculator provides a more complete picture of the recurring housing costs associated with the property.
How Is a Mortgage Payment Calculated?
A mortgage payment starts with the amount you borrow. Subtract the down payment from the home price to determine the base loan amount:
Home price − down payment = loan amount
For a fixed-rate mortgage, the monthly principal-and-interest payment is calculated using the loan amount, interest rate, and loan term. The standard mortgage payment formula is:
M = P × [r(1 + r)n] ÷ [(1 + r)n − 1]
For example, a 30-year mortgage has 360 scheduled monthly payments. The formula determines the level principal-and-interest payment needed to repay the loan over that period at the entered interest rate.
Property taxes, homeowners insurance, PMI, HOA fees, and any extra principal payments are then added where applicable to produce the broader monthly estimate shown by the calculator. If you choose to add estimated closing costs to the loan, the calculator includes those financed costs in the balance used to calculate principal and interest.
For more detail about the formulas, assumptions, and calculations used on this site, see our mortgage calculator methodology.
What Changes Your Mortgage Payment?
Your mortgage payment can change significantly depending on the down payment, interest rate, and loan term you choose. These factors affect either the amount you borrow, the cost of borrowing, or how long you have to repay the loan. You can change each input in the mortgage calculator to compare different loan scenarios before evaluating lender offers.
Down Payment
A larger down payment reduces the amount you need to borrow. With a smaller loan balance, your monthly principal-and-interest payment will generally be lower when the interest rate and loan term remain the same.
The size of your down payment can also affect your loan-to-value ratio (LTV) and whether private mortgage insurance may apply. However, putting more money down also increases the amount of cash needed upfront. Use the calculator's dollar or percentage down-payment options to compare that tradeoff.
Interest Rate
The mortgage interest rate directly affects both your monthly principal-and-interest payment and the total interest paid over the life of the loan. With the loan amount and term unchanged, a lower interest rate results in a lower scheduled P&I payment, while a higher rate results in a higher payment.
Even a relatively small rate difference can become meaningful when applied to a large mortgage balance over many years. Try different rates in the calculator to see how the monthly payment and total interest change for the same loan amount.
Loan Term
The loan term determines how long you have to repay the mortgage. A 30-year mortgage generally spreads repayment across more monthly payments, resulting in a lower scheduled principal-and-interest payment than a shorter term at the same loan amount and interest rate. However, interest has more time to accumulate.
A 15-year mortgage generally requires a higher monthly payment but repays principal faster and can substantially reduce total interest when compared using the same loan amount and interest rate. Neither term is automatically better; the appropriate choice depends on the payment and repayment timeline you are evaluating.
Closing Costs and Discount Points
Your mortgage payment is only part of the cost of financing a home. Closing costs can affect how much cash you need when the loan closes, while discount points may let you pay more upfront in exchange for lender-specific mortgage pricing. MortgagePaymentCalculator.io lets you include both when comparing loan scenarios.
Closing Costs
Closing costs are expenses associated with obtaining and completing a mortgage and can include lender charges, appraisal and title-related costs, recording fees, prepaid expenses, and other transaction costs. The actual amount varies by lender, loan, property, and location, so the percentage entered in the calculator should be treated as an estimate.
Under Closing costs & discount points, you can choose Pay upfront to include estimated closing costs in the upfront cash calculation without increasing the mortgage balance. Choosing Add to loan instead adds those costs to the amount financed. When closing costs are financed, the larger loan balance can increase the monthly principal-and-interest payment and total interest paid over time.
Discount Points
Mortgage discount points are upfront fees associated with obtaining a particular interest rate from a lender. One discount point generally costs 1% of the loan amount, so one point on a $320,000 mortgage would cost $3,200.
Paying points may result in a lower mortgage rate, but there is no universal rate reduction per point. The pricing depends on the lender, loan, market conditions, and the specific rate offer. For that reason, MortgagePaymentCalculator.io includes the cost of the points in the estimated upfront cash needed but does not automatically reduce the interest rate. Enter the actual interest rate associated with the lender quote you want to calculate.
How Extra Payments Can Reduce Mortgage Interest
Making additional payments toward your mortgage principal can reduce the balance faster than following the scheduled payment alone. Because future interest is calculated using the remaining loan balance, paying extra principal can reduce the total interest paid and potentially shorten the time needed to pay off the mortgage.
Open Optional: Make extra payments in the calculator to compare different strategies. You can model an additional amount paid every month, an extra annual payment, or a one-time principal payment in a specific month.
The amortization results show the estimated Interest saved, Months saved, and New payoff date compared with the original payment schedule. You can change the amount or timing of an extra payment to see how the results differ.
Extra payments should generally be applied to principal to produce the modeled effect. Check your mortgage terms and servicer's payment instructions before making additional payments, including whether any restrictions or prepayment penalties apply.
Understanding Your Mortgage Amortization Schedule
A mortgage amortization schedule shows how each scheduled payment reduces your loan over time. With a typical fixed-rate mortgage, more of the principal-and-interest payment generally goes toward interest early in the loan because the outstanding balance is higher. As the balance declines, the interest portion decreases and more of the payment goes toward principal.
Use the calculator's Amortization tab to see how your remaining loan balance, estimated equity, and cumulative interest change throughout the repayment period. The results also show the projected payoff date and reflect eligible extra principal payments you enter in the calculator.
For a more detailed view, open the Detailed amortization schedule below the mortgage-rate table. The schedule summarizes principal, interest, payments, and ending balance by year. Expand an individual year to view the corresponding monthly payment details and see how much of each payment goes toward principal and interest and how the remaining balance changes.
Mortgage Payment Example
Consider a hypothetical $400,000 home with a 20% down payment, a 30-year fixed-rate mortgage, and a 6.50% interest rate:
Home price
$400,000
Down payment
$80,000 (20%)
Loan amount
$320,000
Interest rate
6.50%
Loan term
30 years
Monthly principal & interest
$2,022.62
Using the standard fixed-rate mortgage formula, the estimated monthly principal-and-interest (P&I) payment is $2,022.62, assuming no financed closing costs or extra principal payments.
However, P&I does not necessarily represent the full monthly housing cost. Property taxes and homeowners insurance would increase the monthly estimate, as would HOA fees if the property belongs to an association. PMI may also apply to some mortgage scenarios, although this example uses a 20% down payment and does not include PMI.
Use the calculator to replace these hypothetical numbers with the home price, down payment, interest rate, taxes, insurance, and other costs for the mortgage scenario you want to evaluate.
Frequently Asked Questions About Mortgage Calculators
What is included in a monthly mortgage payment?
A mortgage payment typically includes principal and interest, and it may also include property taxes, homeowners insurance, and mortgage insurance when those expenses are collected through the payment. HOA fees can be added to MortgagePaymentCalculator.io for a broader estimate of recurring housing costs, although HOA dues are separate from the mortgage itself.
How accurate is a mortgage calculator?
A mortgage calculator provides an estimate based on the information you enter. The principal-and-interest calculation can be mathematically precise for the assumptions provided, but actual payments and loan costs may differ because mortgage rates, taxes, insurance, PMI, closing costs, lender fees, and other terms depend on the property, borrower, lender, and loan program.
Does a mortgage calculator include property taxes and insurance?
MortgagePaymentCalculator.io lets you enter estimated monthly property taxes and homeowners insurance so they can be included in the monthly payment breakdown. Because these costs vary by property and location and can change over time, using estimates specific to the home you are considering will generally produce a more useful result than relying on generic assumptions.
How does a larger down payment affect my mortgage payment?
A larger down payment reduces the amount you need to finance, which generally lowers the monthly principal-and-interest payment when the interest rate and loan term stay the same. A larger down payment can also lower the loan-to-value ratio and may affect whether PMI is required, but it increases the amount of cash needed upfront.
When might PMI be included in a mortgage payment?
Private mortgage insurance (PMI) may be required for some conventional mortgages when the borrower has less equity in the property, such as when making a smaller down payment. Requirements and cancellation rules vary, so the calculator's PMI estimate should be used for planning rather than as a substitute for the mortgage-insurance terms provided by a lender.
Can extra mortgage payments save interest?
Yes. Additional payments applied to principal can reduce the outstanding mortgage balance sooner, which can decrease future interest and shorten the repayment period. MortgagePaymentCalculator.io lets you model monthly, annual, and one-time extra payments and compare the estimated interest saved, months saved, and new payoff date with the original amortization schedule.
Are closing costs included in the mortgage calculator?
Yes. MortgagePaymentCalculator.io lets you estimate closing costs as a percentage of the base mortgage amount and model them as either paid upfront or added to the loan. Paying them upfront affects the estimated cash needed at closing, while financing them increases the modeled loan balance and can increase both the monthly principal-and-interest payment and total interest.