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Mortgage Calculator — Free Home Loan Payment Estimator

Calculate your total monthly mortgage payment including principal, interest, property taxes, homeowner insurance, and PMI. Visualize your payment breakdown, track your equity growth over time, and review a complete amortization schedule to make confident homebuying decisions.

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Mortgage Summary

Total Monthly Payment

$2,219.79

Principal & Interest$1,769.79
Property Tax$350.00
Home Insurance$100.00
Loan Amount$280,000.00
Total Interest$357,124.57
Total Cost$799,124.57
Principal & Interest: 79.7%Property Tax: 15.8%Insurance: 4.5%
Principal & Interest79.7%
Property Tax15.8%
Insurance4.5%

Balance vs Equity Over Time

$0K$77K$154K$231K$308K$385K0612182430Year
Remaining Balance
Home Equity

Amortization Schedule

MonthPaymentPrincipalInterestBalance
1$1,769.79$253.12$1,516.67$279,746.88
2$1,769.79$254.49$1,515.30$279,492.38
3$1,769.79$255.87$1,513.92$279,236.51
4$1,769.79$257.26$1,512.53$278,979.25
5$1,769.79$258.65$1,511.14$278,720.60
6$1,769.79$260.05$1,509.74$278,460.54
7$1,769.79$261.46$1,508.33$278,199.08
8$1,769.79$262.88$1,506.91$277,936.20
9$1,769.79$264.30$1,505.49$277,671.90
10$1,769.79$265.73$1,504.06$277,406.16
11$1,769.79$267.17$1,502.62$277,138.99
12$1,769.79$268.62$1,501.17$276,870.37

How to Use the Mortgage Calculator

Our comprehensive mortgage calculator goes beyond simple principal and interest calculations to give you a complete picture of your true monthly homeownership costs. Whether you are a first-time buyer or refinancing an existing mortgage, follow these steps to get accurate payment estimates.

  1. Enter the home price. Input the purchase price of the home. If you are browsing listings, try different price points to find your comfortable range. The calculator works for any home value from starter homes to luxury properties.
  2. Set your down payment. Enter the amount as a dollar value or switch to percentage mode. The calculator automatically shows the equivalent percentage or dollar amount for reference. If your down payment is less than 20%, PMI will be automatically factored into your total payment.
  3. Choose your loan term. Select from 15, 20, or 30-year terms. The 30-year fixed is the most popular choice in America, but 15-year terms save substantial interest over the life of the loan. Compare terms to find your best balance of monthly payment and total cost.
  4. Input the interest rate. Enter the rate from a lender pre-approval letter or use current average rates as a starting point. As of early 2026, 30-year fixed rates average around 6.5% and 15-year rates around 6.0%. Your actual rate depends on your credit profile and market conditions.
  5. Add property tax and insurance. Enter your estimated annual property tax and homeowner insurance costs. You can find property tax estimates on real estate listings or county assessor websites. Insurance costs vary by location and coverage level, typically $1,000 to $3,000 per year.
  6. Review your complete results. The calculator shows your total monthly payment with a detailed breakdown, a pie chart of payment components, a line chart showing balance vs equity over time, and a full month-by-month amortization schedule.

Adjust any input to instantly see how changes affect your payment. This makes it easy to explore "what if" scenarios, like how a larger down payment reduces your monthly cost or how a shorter term saves on total interest.

Mortgage Formula and Payment Calculation

The mortgage payment calculation uses the same standard amortization formula used by every bank and lender in the United States. Understanding this formula helps you verify quotes and make informed decisions about your home financing.

M = P × [r(1 + r)n] / [(1 + r)n − 1]

Where each variable represents:

  • M = Monthly principal and interest payment
  • P = Loan principal (home price minus down payment)
  • r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
  • n = Total number of monthly payments (years × 12)

Your total monthly payment (PITI) adds:

  • Property Tax = Annual property tax ÷ 12
  • Insurance = Annual homeowner insurance ÷ 12
  • PMI = (Loan amount × PMI rate) ÷ 12 (only if down payment < 20%)

Step-by-Step Calculation Example

Calculate the payment for a $350,000 home with 20% down ($70,000), 30-year term, 6.5% rate, $4,200 annual property tax, and $1,200 annual insurance:

  1. Calculate loan amount: $350,000 − $70,000 = $280,000
  2. Convert rate to monthly: r = 6.5% ÷ 12 ÷ 100 = 0.005417
  3. Calculate total payments: n = 30 × 12 = 360
  4. Calculate growth factor: (1.005417)360 = 6.9913
  5. Calculate P&I payment: $280,000 × [0.005417 × 6.9913] / [6.9913 − 1] = $1,770
  6. Add property tax: $4,200 ÷ 12 = $350
  7. Add insurance: $1,200 ÷ 12 = $100
  8. PMI: Not applicable (20% down payment)
  9. Total monthly payment: $1,770 + $350 + $100 = $2,220

Over 30 years, you would pay $637,200 in principal and interest alone, meaning $357,200 goes to interest. This demonstrates why even small rate differences matter enormously on mortgages. A 0.5% lower rate on this same loan would save approximately $33,000 in total interest over the life of the loan.

Understanding the Amortization Process

In your first payment of $1,770, approximately $1,517 goes to interest and only $253 to principal. This ratio gradually shifts over the loan term. By month 180 (year 15), the split is roughly $1,051 interest and $719 principal. By the final year, nearly the entire payment goes to principal. This front-loaded interest structure is why extra payments made early in the loan term have the greatest impact on reducing total interest costs.

Practical Mortgage Examples

These real-world scenarios illustrate how different mortgage variables affect your payments and total costs. Each example uses realistic 2026 market conditions to help you plan your home purchase.

First-Time Buyer: Starter Home with 10% Down

Jessica and Ryan are buying their first home at $280,000 with 10% down ($28,000). At 6.75% for 30 years, their principal and interest payment is $1,635. With $3,360 annual property tax and $1,080 annual insurance, their total PITI is $2,005 per month. Because their down payment is under 20%, they also pay PMI at 0.5% ($105/month), bringing the total to $2,110. Once they reach 20% equity (approximately year 8 with normal payments), they can eliminate the $105 PMI, reducing their payment to $2,005.

Move-Up Buyer: Larger Home with 20% Down

The Thompson family is upgrading to a $475,000 home using $150,000 from their previous home sale as a down payment (31.6%). Their loan amount is $325,000 at 6.5% for 30 years, with a principal and interest payment of $2,054. Annual property tax of $5,700 adds $475/month, and insurance of $1,680 adds $140/month. Their total payment is $2,669. Because their down payment exceeds 20%, no PMI is required. Over 30 years, they will pay approximately $414,554 in interest on the principal and interest component alone.

15-Year Term: Aggressive Payoff Strategy

Dr. Patel earns a high income and wants to be mortgage-free quickly. She purchases a $400,000 home with 25% down ($100,000), borrowing $300,000 at 6.0% for 15 years. Her principal and interest payment is $2,532 compared to $1,799 for a 30-year at 6.5%. While her monthly payment is $733 higher, she saves $278,368 in total interest ($155,706 for 15-year vs $347,506 for 30-year) and owns her home outright in half the time. Her total PITI with $4,800 taxes and $1,440 insurance is $3,052.

Refinancing: Lowering Your Rate

The Garcia family purchased their home 5 years ago with a $320,000 mortgage at 7.25% for 30 years. Their current payment is $2,183 (P&I only) and remaining balance is approximately $299,000. By refinancing to a new 25-year mortgage at 6.25%, their payment drops to $2,001, saving $182 per month. Even after $6,000 in closing costs, they break even in 33 months and save approximately $48,600 over the remaining life of the loan. The key decision point is whether the monthly savings justify the closing costs given how long they plan to stay in the home.

Mortgage Comparison Reference Table

Home Price Down Payment Rate / Term Monthly P&I Total Interest
$250,000 20% ($50K) 6.5% / 30yr $1,264 $255,088
$350,000 20% ($70K) 6.5% / 30yr $1,770 $357,224
$350,000 20% ($70K) 6.0% / 15yr $2,363 $145,356
$450,000 10% ($45K) 6.75% / 30yr $2,626 $540,345
$500,000 25% ($125K) 6.25% / 30yr $2,312 $457,184
$300,000 5% ($15K) 7.0% / 30yr $1,896 $397,517

Mortgage Tips and Complete Home Buying Guide

Buying a home is the largest financial decision most people make. These strategies help you secure the best mortgage terms and avoid costly mistakes throughout the process.

Get Pre-Approved Before House Hunting

A mortgage pre-approval letter from a lender tells you exactly how much you can borrow and at what rate, based on a thorough review of your finances. Pre-approval is different from pre-qualification, which is a rough estimate. Having a pre-approval letter strengthens your offers and shows sellers you are a serious, qualified buyer. The process typically requires providing pay stubs, tax returns, bank statements, and a credit check. Pre-approval letters are usually valid for 60-90 days.

Shop Multiple Lenders and Compare Loan Estimates

According to Freddie Mac research, borrowers who obtain just one additional mortgage quote save an average of $1,500 over the life of the loan, and those who get five quotes save an average of $3,000. Request Loan Estimates (a standardized three-page document required by federal law) from at least three to five lenders, including banks, credit unions, and online lenders. Compare the interest rate, APR, closing costs, and monthly payment. The Loan Estimate makes it easy to do an apples-to-apples comparison because the format is standardized.

Build the Largest Down Payment You Can

A larger down payment reduces your loan amount, may qualify you for a better interest rate, eliminates or reduces PMI costs, and provides immediate equity as a financial safety net. The 20% threshold is important because it eliminates PMI entirely. On a $350,000 home, the difference between 10% and 20% down is $35,000 more upfront but saves approximately $105-200 per month in PMI payments and reduces your loan amount by $35,000. However, do not deplete your emergency fund for a larger down payment because unexpected home expenses are common.

Consider the Total Cost of Homeownership

Your mortgage payment is just part of the total cost. Budget for property taxes (which can increase annually), homeowner insurance, HOA fees if applicable, maintenance and repairs (typically 1-2% of home value per year), utilities, and potential major expenses like a new roof or HVAC system. Financial planners recommend keeping your total housing cost (mortgage plus these additional expenses) below 30% of your gross income to maintain financial flexibility and avoid becoming house poor.

Common Mistakes to Avoid

  • Maxing out your approved amount. Just because you are approved for a certain amount does not mean you should borrow that much. Lenders approve based on debt ratios, but they do not account for your lifestyle, savings goals, or future plans. Borrow comfortably below your maximum.
  • Ignoring closing costs in your budget. Closing costs of 2-5% of the loan amount must be paid at closing. On a $280,000 loan, that is $5,600 to $14,000. Plan for these on top of your down payment so you are not caught short.
  • Making large purchases before closing. Taking on new debt (car loan, furniture, credit cards) after pre-approval but before closing can change your debt-to-income ratio and jeopardize your mortgage approval. Wait until after closing to make large purchases.
  • Skipping the home inspection. A professional home inspection costs $300-500 but can reveal thousands of dollars in needed repairs. Never waive the inspection contingency unless you truly understand and accept the risks.
  • Not accounting for rate lock timing. Mortgage rates can change daily. Once you have an accepted offer, lock your rate promptly. A rate lock typically lasts 30-60 days. If closing takes longer, you may need to pay for a lock extension.

Frequently Asked Questions

Most financial advisors and lenders recommend that your total monthly housing payment (principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income. This is known as the front-end debt-to-income ratio. For example, if your household gross income is $8,000 per month, your housing payment should stay below $2,240. Additionally, your total monthly debt payments (housing plus car loans, student loans, credit cards) should not exceed 36% of gross income. Use our mortgage calculator to find payment amounts that fit within these guidelines for your income level.

Private Mortgage Insurance (PMI) is required by lenders when your down payment is less than 20% of the home price. PMI protects the lender (not you) if you default on the loan. PMI typically costs 0.3% to 1.5% of the original loan amount per year, added to your monthly payment. You can request PMI removal once your loan-to-value ratio reaches 80% (meaning you have 20% equity). Under the Homeowners Protection Act, lenders must automatically cancel PMI when your equity reaches 22%. Making extra payments to build equity faster can help you eliminate PMI sooner.

A 15-year mortgage has significantly lower total interest costs and a lower interest rate (typically 0.5-0.75% less than 30-year rates), but the monthly payments are substantially higher. For a $280,000 mortgage at 6.5% (30-year: $1,770/month, total interest: $357,224) versus 6.0% (15-year: $2,363/month, total interest: $145,356). The 15-year saves $211,868 in interest but requires $593 more per month. Choose a 15-year if you can comfortably afford the higher payment. Choose a 30-year if you need lower payments for cash flow or want flexibility to invest the difference elsewhere.

Several factors influence the rate you are offered: credit score (scores above 740 get the best rates; each 20-point drop typically adds 0.125-0.25% to your rate), down payment amount (larger down payments mean lower rates), loan type (conventional, FHA, VA, or USDA), loan term (shorter terms have lower rates), property type (single-family homes get better rates than condos or multi-family), occupancy (primary residence gets better rates than investment property), and current market conditions influenced by the Federal Reserve and bond markets.

Closing costs are the fees charged when you finalize (close) your mortgage. They typically range from 2% to 5% of the loan amount. On a $280,000 mortgage, expect $5,600 to $14,000 in closing costs. These include lender fees (origination, underwriting, processing), third-party fees (appraisal, title insurance, attorney), and prepaid items (property taxes, homeowner insurance, prepaid interest). Some costs are negotiable. Shopping among multiple lenders and comparing Loan Estimates (standardized forms required by law) helps you find the best deal on closing costs.

A larger down payment has multiple benefits: it reduces your loan amount (lower monthly payment and less total interest), may qualify you for a lower interest rate, eliminates or reduces PMI costs (20% down eliminates PMI entirely), gives you immediate home equity as a financial cushion, and makes your offer more attractive to sellers. However, draining all your savings for a larger down payment can be risky. Financial advisors recommend maintaining 3-6 months of expenses in emergency savings after closing. Our calculator lets you toggle between dollar and percentage amounts to find the right down payment for your situation.

An amortization schedule is a month-by-month breakdown showing how each mortgage payment is split between principal (paying down your loan balance) and interest. In the early years, most of your payment goes toward interest. For a 30-year $280,000 mortgage at 6.5%, the first payment allocates $1,517 to interest and only $253 to principal. By payment 180 (year 15), the split is roughly even. By the final years, most goes to principal. Understanding this helps you see the real impact of extra payments (which all go to principal) and why making extra payments early in the loan saves the most money.

Property taxes and homeowner insurance are often collected monthly by your lender as part of your total payment and held in an escrow account until due. Property taxes vary widely by location, averaging about 1.1% of home value nationally but ranging from 0.3% (Hawaii) to 2.2% (New Jersey). Homeowner insurance typically costs $1,000 to $3,000 per year depending on location, home value, and coverage. Together, taxes and insurance can add $300 to $600 or more to your monthly payment. Our calculator includes both so you see the true total cost of homeownership.

The rent-vs-buy decision depends on many factors: how long you plan to stay (buying typically makes sense if you stay 5+ years), local market conditions (price-to-rent ratio), your financial readiness (stable income, adequate savings, manageable debt), tax benefits of homeownership (mortgage interest and property tax deductions), and the opportunity cost of your down payment. In general, if you plan to stay in an area for at least 5 years, have a stable income, and can comfortably afford the total monthly payment without stretching your budget, buying often makes financial sense over the long term because you build equity instead of paying rent.

The main mortgage types are: Conventional loans (not government-backed, require 620+ credit score, 3-20% down payment, PMI if under 20% down), FHA loans (government-insured, require 580+ credit score, as little as 3.5% down, includes mandatory mortgage insurance), VA loans (for eligible veterans and service members, no down payment required, no PMI, competitive rates), USDA loans (for rural properties, no down payment, income limits apply), and Jumbo loans (for amounts exceeding conforming loan limits, typically require 700+ credit score and 10-20% down). Each type has different qualification requirements, rates, and fee structures.

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Disclaimer: This calculator is for informational purposes only and does not constitute financial advice. Consult a qualified financial advisor before making financial decisions.

Last updated: February 23, 2026

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