Mortgage Calculator
Estimate your monthly mortgage payment — including principal, interest, property tax, and home insurance — and see exactly where your money goes.
How this calculator works
This calculator uses the standard fixed-rate amortization formula to work out the principal and interest portion of your payment, then layers on property tax and home insurance for your real monthly cost.
M = monthly payment · P = loan principal · i = monthly interest rate · n = number of payments
What affects your monthly mortgage payment
Four factors drive the number above: the loan amount (home price minus down payment), the interest rate, the loan term, and your local property tax and insurance costs.
Interest rate has an outsized effect — even half a percentage point can shift your monthly payment by tens of dollars and your lifetime interest by thousands. On a $320,000 loan, moving from 6.5% to 7% adds roughly $110 to the monthly payment and around $40,000 in extra interest over 30 years.
Loan term is the other major lever. A 30-year term spreads the same loan amount over more payments, lowering the monthly cost but increasing total interest paid. A 15-year term roughly doubles the monthly payment but can cut total interest by more than half, since less time means less compounding interest and a much higher share of each payment goes toward principal from the start.
A worked example
Say you're buying a $400,000 home with $80,000 down (20%), a 6.5% interest rate, and a 30-year term. The loan principal is $320,000. Plugging that into the amortization formula gives a principal-and-interest payment of about $2,022 per month.
Add $300 a month for property tax (based on $3,600/year) and about $117 for home insurance ($1,400/year), and your total monthly housing payment comes to roughly $2,439. Over 30 years, you'd pay about $407,920 in interest alone — more than the original loan amount — which is exactly why even small rate differences matter so much over a mortgage's lifetime.
Now compare a 15-year term at the same rate: the monthly principal-and-interest payment jumps to about $2,787, but total interest drops to roughly $181,660 — less than half of the 30-year scenario. The trade-off is a higher monthly commitment in exchange for paying off the home faster and spending far less on interest overall.
Common mistakes when estimating a mortgage payment
Forgetting property tax and insurance is the most frequent error — lenders often quote 'principal and interest' figures that look smaller than your actual monthly obligation once taxes, insurance, and (if applicable) PMI or HOA fees are added.
Another common mistake is assuming your quoted interest rate is fixed for comparison shopping without also comparing the APR, which includes lender fees and gives a more complete picture of the loan's true cost.
It's also easy to underestimate how much a lower down payment increases long-term cost — beyond the higher loan balance, a down payment under 20% on a conventional loan usually triggers private mortgage insurance (PMI), an extra monthly cost that continues until you reach roughly 20% equity.
Practical ways to lower your monthly payment
A larger down payment is the most direct lever — every dollar you put down reduces the loan principal, which lowers both the monthly payment and total interest simultaneously, and it can also help you avoid PMI entirely if it gets you to 20% equity.
Shopping multiple lenders for rate is often underused. Mortgage rates can vary by a quarter to half a percentage point between lenders for the same borrower profile, and on a $320,000 loan, even a 0.25% difference changes the monthly payment by roughly $50 and lifetime interest by thousands.
Extending the loan term (30 years instead of 15 or 20) lowers the monthly payment, though at the cost of more total interest — useful if monthly cash flow is the priority over minimizing lifetime cost. Buying discount points upfront to lower your rate is another option, generally worthwhile if you plan to stay in the home long enough for the monthly savings to exceed the upfront cost.
Finally, refinancing later if rates drop, or making extra principal payments when you have surplus cash, are both ways to reduce total interest after the loan is already in place — most mortgages allow this without penalty, so it's worth checking your specific loan terms. Use the Refinance Calculator to check whether that makes sense once rates move, and the Down Payment Calculator to see how much upfront cash changes your loan amount.
Frequently asked questions
How is a monthly mortgage payment calculated?
It's calculated from the loan amount, interest rate, and loan term using a standard amortization formula, then combined with property tax and insurance to show your full monthly housing cost.
What is a good down payment for a mortgage?
20% is the traditional benchmark because it avoids private mortgage insurance (PMI), but many loan programs accept much less — sometimes as low as 3%.
Does this calculator include property tax and insurance?
Yes — enter your estimated annual figures and they're added automatically to your principal and interest payment above.
Why does a 15-year mortgage cost so much less in total interest?
With half the term, less time passes for interest to compound, and a larger share of each payment goes toward principal from the very first month rather than mostly toward interest early on, as happens with longer terms.
What is PMI and when do I have to pay it?
Private mortgage insurance protects the lender (not you) when your down payment is below 20% on a conventional loan. It's typically added to your monthly payment and can usually be removed once you reach about 20% equity.
Should I choose a fixed or adjustable rate?
A fixed rate keeps your principal-and-interest payment constant for the life of the loan, which is why this calculator uses that structure. Adjustable-rate mortgages start lower but can rise after an initial fixed period, adding uncertainty this calculator doesn't model.
How much does the interest rate really matter?
More than most people expect — on a typical 30-year loan, each 0.5% increase in rate adds roughly 5-6% to your monthly payment and tens of thousands of dollars in total interest, which is why it's worth shopping multiple lenders.
Can I pay off my mortgage faster than the term I chose?
Yes — most mortgages allow extra principal payments without penalty, which reduces total interest and shortens the payoff timeline even if you keep a 30-year term for payment flexibility.