How to use the mortgage calculator
Start with the purchase price of the home and the share you plan to pay up front as a down payment. Enter the annual interest rate your lender quoted and the length of the loan, usually 15 or 30 years. The tool immediately works out the loan amount and the monthly principal-and-interest payment. To see what you will actually pay each month, add your yearly property tax, your homeowner's insurance premium and any homeowners-association dues. If you put down less than 20%, many lenders add private mortgage insurance (PMI); enter the yearly PMI rate and it is included automatically. When your down payment reaches 20% the PMI line drops to zero.
How the monthly payment is calculated
A fixed-rate mortgage is repaid in equal monthly installments. Each installment covers that month's interest first, and whatever is left reduces the balance. The standard annuity formula is:
where P is the amount borrowed, r is the yearly rate divided by 12, and n is the number of monthly payments. Taxes, insurance, PMI and HOA dues are then added on top because most lenders collect them through an escrow account together with the loan payment.
Reading the amortization schedule
The table below the calculator groups every payment by year. Early on, most of each payment is interest; by the final years almost all of it goes to principal. This is why extra payments made early in the loan save far more interest than the same amount paid late. The colored bar shows how the total cost splits between the money you borrowed, the interest you pay the lender and the recurring housing costs.
Tips for a lower payment
- A larger down payment shrinks the loan and can remove PMI.
- A 15-year term has a higher monthly payment but usually a lower rate and much less total interest.
- Shop several lenders – a difference of 0.25% on the rate adds up to thousands over 30 years.
- Ask your county for the real property-tax rate rather than guessing.
Results are estimates for planning; your lender's Loan Estimate is the binding figure.
Frequently asked questions
What is a good mortgage payment relative to income?
A common guideline is to keep total housing costs below about 28% of gross monthly income and all debt payments below about 36%. Lenders may allow more, but staying under these levels leaves room for savings and emergencies.
Does this mortgage calculator include PMI?
Yes. If your down payment is under 20%, the PMI rate you enter is applied to the loan amount and added to the monthly payment. With 20% or more down it is ignored.
Why is so much of my early payment interest?
Interest is charged on the outstanding balance. At the start the balance is highest, so the interest portion is largest. As the balance falls, more of each fixed payment goes to principal.
Can I use it for a refinance?
Yes. Enter the current balance as the home price with a 0% down payment, then the new rate and term to compare your new payment with the old one.
Last reviewed 2026-10-27. This mortgage calculator is provided for general information; verify important decisions with a qualified professional.