Mortgage Calculator

Home Price ($)

Down Payment ($)

Down Payment (%)

Loan Term (years)

Interest Rate (%)

Property Tax (/year)

Home Insurance (/year)

PMI Rate (%)

Applied if down payment < 20%

Disclaimer

Results are estimates for informational purposes only. Actual loan terms, rates, and payments may vary based on your credit score, income, and other factors. Please consult a licensed financial advisor or mortgage professional before making any financial decisions.

What is Mortgage Calculator?

A mortgage is a loan used to purchase a home, where the property itself serves as collateral. The borrower makes monthly payments over a set term (typically 15-30 years) that include principal (the amount borrowed), interest, property taxes, and insurance. Understanding your mortgage payment breakdown helps you budget effectively and make informed decisions about home buying.

How to Use

Enter the home price - the total purchase price of the property.
Input your down payment amount or percentage (typically 10-20%).
Select your loan term - shorter terms have higher payments but less interest.
Enter the interest rate from your lender or current market rates.
Add optional property tax and insurance estimates for total monthly cost.
Click Calculate to see your complete payment breakdown and amortization.

Why Use This Tool?

Understand exactly how much you'll pay monthly before committing to a mortgage

See the breakdown between principal, interest, taxes, and insurance (PITI)

Compare different loan terms to find the best fit for your budget

Plan for PMI if your down payment is less than 20%

View amortization schedule to understand how payments reduce your loan

Make informed decisions about refinancing or extra payments

Tips & Best Practices

A 20% down payment eliminates PMI and reduces your monthly costs significantly
15-year mortgages have higher payments but save tens of thousands in interest
Property taxes and insurance can add $200-500+ to your monthly payment
Interest rates change daily - shop around and get multiple lender quotes
Extra payments toward principal can significantly reduce your loan term
Consider your total monthly housing cost should be under 30% of gross income

Frequently Asked Questions

What is PMI and when do I need it?

Private Mortgage Insurance (PMI) is required when your down payment is less than 20% of the home price. It protects the lender if you default on the loan. PMI typically costs 0.5-1% of the loan amount annually. Once you reach 20% equity, you can request PMI removal.

How is the monthly mortgage payment calculated?

The formula used is: M = P × [r(1+r)^n] / [(1+r)^n - 1], where M is monthly payment, P is principal, r is monthly interest rate, and n is number of payments. This is the standard amortization formula that ensures equal monthly payments over the loan term.

Should I choose a 15-year or 30-year mortgage?

15-year mortgages have lower interest rates and save significantly on total interest, but require higher monthly payments. 30-year mortgages offer lower payments and more flexibility, but cost more in total interest. Choose based on your budget and long-term financial goals.

What are typical property tax and insurance costs?

Property taxes average 1-2% of home value annually ($3,000-6,000 per year for a $300,000 home). Home insurance averages $1,000-2,000 annually. Both vary by location, home value, and coverage level. These are often included in your monthly mortgage payment via an escrow account.

How can I reduce my total interest paid?

Make extra principal payments when possible, choose a shorter loan term, refinance to a lower rate when rates drop, and avoid extending your loan term when refinancing. Even small extra payments can save thousands over the life of the loan.

What closing costs should I expect?

Closing costs typically range from 2-5% of the loan amount ($6,000-15,000 on a $300,000 loan). They include appraisal fees, title insurance, loan origination fees, and other processing costs. Some closing costs are negotiable or can be rolled into the loan.