How to use the Mortgage Calculator
- 1 Enter the home price and your down payment in dollars.
- 2 Enter the interest rate (APR) and choose the loan term, such as 30 or 15 years.
- 3 Add yearly property tax and insurance, the PMI rate if your down payment is under 20%, and any monthly HOA fees.
- 4 Read the total monthly payment and the breakdown, including total interest over the life of the loan.
Worked example
$400,000 home, $80,000 down, 6.5% for 30 years. The loan is $320,000. Principal and interest are about $2,022.62 a month. Adding $4,000 a year property tax ($333.33) and $1,500 insurance ($125.00) gives about $2,480.95 a month. With 20% down there is no PMI.
Features
Full monthly cost
Principal and interest, property tax, insurance, PMI and HOA fees are added together, the way lenders show it on a Loan Estimate.
PMI only when needed
PMI is added automatically when the down payment is below 20% of the price, and dropped at 20% or more.
Total interest
See how much interest you pay over 15, 20 or 30 years, which makes the cost of a longer term clear.
When to use it
Setting a budget
Try different prices to find the home that keeps your total payment within what you can comfortably pay each month.
15 vs 30 years
Compare a 15-year and a 30-year loan: the monthly payment is higher on the shorter term, but the total interest is far lower.
How much to put down
See how a 20% down payment removes PMI and lowers both the loan and the monthly payment.
Frequently asked questions
How is a monthly mortgage payment calculated?
Principal and interest use the standard amortization formula: loan × r ÷ (1 − (1 + r)^−n), where r is the monthly rate and n the number of payments. Taxes, insurance, PMI and HOA fees are then added.
What is PMI?
Private mortgage insurance protects the lender on a conventional loan when you put down less than 20%. It is usually removed once you reach 20% equity, and must end at 22% on schedule for most loans.
Does this include closing costs?
No. Closing costs, often 2% to 5% of the price, are paid when you buy and are not part of the monthly payment.
Why is my lender's payment different?
Lenders use your exact property tax, insurance quote, PMI rate and fees. Use this result as a careful estimate and check the Loan Estimate you receive.
What interest rate should I enter?
Use the APR from a lender quote. Rates change daily and depend on your credit score, down payment and loan type.
Can extra payments shorten my mortgage?
Yes. Any extra amount paid toward principal reduces the balance sooner, which cuts total interest and can take years off the loan. Check that your loan has no prepayment penalty first.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated