A mortgage payment is more than just paying back what you borrowed — it combines loan principal, interest, property taxes, and homeowners insurance into one monthly amount. This mortgage calculator shows your complete estimated monthly payment and how much interest you will pay over the life of the loan.
Enter your home price, down payment, interest rate, and loan term to get an instant estimate. The yearly amortization table shows exactly how each year of payments splits between principal and interest, and how your remaining balance falls over time.
How Mortgage Payments Are Calculated
Lenders use the standard amortization formula to compute your fixed monthly principal-and-interest payment:
M = P × [r(1 + r)^n] / [(1 + r)^n − 1]
Where M is the monthly payment, P is the loan principal (home price minus down payment), r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12).
Early in the loan, most of each payment goes to interest because the balance is still large. As the balance shrinks, more of each payment goes toward principal — that shift is what the amortization schedule shows.
How Much House Can You Afford?
A common guideline is the 28/36 rule: spend no more than 28% of gross monthly income on housing costs and no more than 36% on total debt payments.
- A 20% down payment avoids private mortgage insurance (PMI), which typically costs 0.3%–1.5% of the loan amount per year.
- A 15-year term carries a higher monthly payment but can cut total interest paid by more than half compared with a 30-year term.
- Even a 0.5 percentage point lower rate can save tens of thousands of dollars over 30 years, so compare multiple lenders.
Example: $400,000 Home with 20% Down
Suppose you buy a $400,000 home with an $80,000 down payment (20%), leaving a $320,000 loan at 6.5% APR for 30 years.
Monthly principal and interest come to about $2,023. Over 360 payments you would pay roughly $408,142 in interest — more than the original loan amount. Choosing a 15-year term instead raises the payment to about $2,787 but cuts total interest to roughly $181,732.
Frequently Asked Questions
What is included in a monthly mortgage payment?
Most payments have four parts, often called PITI: principal (the amount borrowed), interest (the lender’s charge), property taxes, and homeowners insurance. If your down payment is under 20%, private mortgage insurance (PMI) is usually added.
How much down payment do I need?
Conventional loans allow as little as 3% down, FHA loans 3.5%, and VA/USDA loans 0%. However, putting at least 20% down avoids PMI and lowers your monthly payment.
Is a 15-year or 30-year mortgage better?
A 30-year mortgage has lower monthly payments and more flexibility; a 15-year mortgage has a lower interest rate and dramatically less total interest. Choose 15 years if the higher payment fits comfortably in your budget.
What is an amortization schedule?
It is a table showing each payment split between interest and principal, plus the remaining balance. Early payments are mostly interest; later payments are mostly principal.
How can I pay off my mortgage faster?
Make extra principal payments, switch to biweekly payments (26 half-payments equals 13 full payments per year), or refinance to a shorter term. Even one extra payment per year on a 30-year loan can shorten it by 4–5 years.