How to calculate mortgage
M = P × r(1 + r)ⁿ ÷ ((1 + r)ⁿ − 1) P = loan amount, r = monthly rate, n = number of payments
Worked example. Your estimated payment: $2,514 / month.
Example inputs — Home price: $400,000; Down payment entered as: Dollar amount; Down payment: $80,000; Interest rate: 6.5%; Loan term: 30 years; Property tax (yearly): 1.1%; Home insurance (yearly): $1,500; HOA (monthly): $0.00; PMI entered as: Percent of loan / year; PMI rate: 0.5%. Starting values are illustrative.
From George Guju, founder of Calculyn · Educational calculator guidance, not professional advice.
Common questions answered
How it works
Your monthly mortgage payment is made of principal and interest on the loan, plus property tax, homeowner's insurance, and sometimes HOA dues and private mortgage insurance (PMI) when you put down less than 20%.
Using the mortgage estimate
A mortgage payment is only one part of the cost of owning a home. This calculator brings the loan payment and recurring housing charges together, so you can compare a listing price with the amount you would actually need each month. Use the home price rather than the loan amount in the first field, then subtract your down payment through the amount or percentage option. A lender's quote is the right source for your interest rate; the starting rate here is an illustration, not a live offer.
Step-by-step inputs
- Home price. Replace the starting value with your own, keeping the displayed unit and period. Starting example: $400,000 .
- Down payment entered as. Replace the starting value with your own, keeping the displayed unit and period. Starting example: Dollar amount .
- Down payment. Replace the starting value with your own, keeping the displayed unit and period. Starting example: $80,000 .
- Interest rate. Replace the starting value with your own, keeping the displayed unit and period. Starting example: 6.5% .
- Loan term. Replace the starting value with your own, keeping the displayed unit and period. Starting example: 30 years .
Worked example with the starting values
Using the starting inputs, the estimate is Your estimated payment: $2,514 / month.
- Principal & interest
- $2,023
- Property tax
- $367
- Insurance
- $125
- Total interest
- $408,142
Compare loan term scenarios
All other inputs stay at their starting values. These are modeled comparisons, not quotes, predictions or individual recommendations.
| Loan term | Your estimated payment |
|---|---|
| 15 years | $3,279 / month |
| 20 years | $2,878 / month |
| 30 years | $2,514 / month |
Make a useful comparison
Compare loan terms while holding the price, down payment and rate constant. A shorter term generally raises the monthly principal-and-interest payment but reduces interest over the loan's life. The comparison below isolates the term; actual lenders may quote different rates for different terms.
Open Advanced options before judging affordability. Property tax is entered as an annual percentage of the home price, insurance as an annual dollar amount, and HOA dues as a monthly amount. These are not interchangeable. Local tax assessments and exemptions can make your actual bill different from a price-based estimate.
If the down payment is below 20%, the model adds PMI. Choose an annual percentage of the loan or a monthly dollar amount, according to your quote. With at least 20% down, this calculator removes that PMI charge. Mortgage insurance on other loan programs can follow different rules, so use the loan disclosure rather than assuming every mortgage behaves this way.
Common mistakes to avoid
- Do not enter the purchase price as an already-reduced loan balance and then subtract the down payment again. That double-counts your cash contribution and understates the payment.
- The result is not your cash needed at closing. Lender fees, title charges, prepaid escrow, moving expenses and repairs need a separate budget. The total-interest line covers the modeled loan interest, not all ownership costs.
- A fixed-rate calculation holds the rate steady. Adjustable rates, refinancing, extra payments and future changes in taxes or insurance are not predicted. Test a higher recurring-cost scenario before treating the current monthly estimate as a permanent ceiling.
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Assumptions & limitations
- Fixed interest rate for the full term.
- Excludes closing costs, points and rate changes.
- Property tax and insurance are treated as steady yearly amounts.
Formula and assumptions reviewed October 2026 by the Calculyn team. How we build our calculators
Frequently asked questions
How much will my monthly mortgage payment be?
Calculate principal and interest from the loan balance, interest rate and term, then add monthly property tax, insurance, HOA and applicable PMI. This calculator includes those recurring costs; your lender's quote may differ.
What is an amortization schedule?
It is a payment-by-payment record of loan interest, principal repaid and balance remaining. On a fixed-rate mortgage the loan payment stays level, while its interest and principal shares change.
Will extra payments reduce my interest?
Extra payments applied to principal reduce the balance on which future interest is charged. Use the mortgage extra payment calculator to compare payoff time; check your servicer's instructions and any prepayment penalty.
Do mortgage calculators include closing costs?
This mortgage calculator does not include upfront closing costs. Budget lender charges, title and settlement costs, prepaid items and any points separately from the monthly payment.
How much do you save with a 15-year mortgage vs a 30-year mortgage?
Compare total interest using the same loan amount and the actual quoted rates for each term. A shorter term usually raises the monthly payment but reduces interest. Taxes and insurance do not disappear when the term changes.
Is it better to get a 30-year mortgage and pay extra?
It can preserve a lower required payment while letting you repay faster, but the 30-year quote may have a higher rate. Compare total interest and payment flexibility rather than assuming the two options are equivalent.
Can you switch from a 30-year to a 15-year mortgage?
Usually that means refinancing into a new loan, subject to approval, costs and current rates. Paying extra on an existing loan may shorten payoff without changing its contractual term.
What credit score do I need for a mortgage?
Requirements vary by loan program, lender and borrower circumstances. This calculator does not check credit or establish eligibility. Ask the lender about its current requirements and compare the full loan terms.
What is PMI?
Private mortgage insurance protects the lender when your down payment is under 20%. It usually costs 0.3%–1.5% of the loan per year.
Is the interest rate a current mortgage quote?
No. Starting values are illustrative. Enter a quote from your lender and confirm which fees are included; an APR and the note's interest rate need not be the same.
Why is the full payment higher than principal and interest?
The headline also adds modeled property tax, insurance, HOA and applicable PMI. These recurring charges are separate from repayment of the loan.