Mortgage Calculator
What Is a Mortgage Payment?
A mortgage is a loan used to buy a home, repaid in fixed monthly installments over many years, commonly 15 or 30. Your monthly payment is usually more than just the loan repayment. In many countries it also includes property tax and home insurance. Seeing the full monthly figure before you fall in love with a house is one of the smartest steps in home buying.
Our free Mortgage Calculator above breaks your payment into its parts. Enter the home price, your down payment, the interest rate, the loan term, your yearly property tax rate and your annual home insurance cost, and you will see your total monthly payment, how much is principal and interest, and how much interest you will pay over the whole loan.
How to Use This Mortgage Calculator
- Home price: the purchase price of the property.
- Down payment: the cash you pay upfront. The calculator subtracts it to find your loan amount.
- Annual interest rate: the mortgage rate quoted by your lender.
- Loan term: the number of years, such as 15, 20 or 30.
- Property tax: the yearly tax as a percentage of the home price.
- Home insurance: your estimated yearly insurance premium.
- Press Calculate.
How the Payment Is Calculated
The principal and interest part of the payment uses the standard loan formula:
M = L × r × (1 + r)n ÷ [(1 + r)n − 1]
- M is the monthly principal and interest payment.
- L is the loan amount (home price minus down payment).
- r is the monthly interest rate (annual rate ÷ 12).
- n is the number of monthly payments (years × 12).
Property tax is converted to a monthly amount by multiplying the home price by the tax rate and dividing by 12. Insurance is the yearly premium divided by 12. Add the three together and you have the total monthly payment shown by the calculator.
Worked Example
Say you buy a $350,000 home with a $70,000 down payment (20%). The loan is $280,000 at 6.5% over 30 years, with property tax of 1.1% per year and insurance of $1,200 per year.
| Component | Monthly Amount |
|---|---|
| Principal and interest | $1,769.79 |
| Property tax | $320.83 |
| Home insurance | $100.00 |
| Total monthly payment | $2,190.62 |
Over 30 years you would pay about $357,125 in interest on that $280,000 loan, which is more than the amount you borrowed.
15-Year vs 30-Year Mortgage
The loan term is one of the biggest decisions you will make. Here is the same $280,000 loan at 6.5% over two terms (principal and interest only):
| Term | Monthly P&I | Total Interest |
|---|---|---|
| 30 years | $1,769.79 | $357,124.57 |
| 15 years | $2,439.10 | $159,038.11 |
The 15-year mortgage costs about $670 more each month but saves roughly $198,000 in interest. The 30-year option keeps monthly payments lower and leaves more room in your budget. There is no universally right answer; it depends on your income stability, other goals and comfort with a bigger monthly commitment.
How Much Does the Interest Rate Matter?
Small rate differences add up to big money over decades. Using the same $280,000 loan over 30 years:
| Rate | Monthly P&I | Total Interest |
|---|---|---|
| 6.5% | $1,769.79 | $357,124.57 |
| 5.5% | $1,589.81 | $292,331.31 |
A single percentage point lower saves about $180 per month and more than $64,000 over the life of the loan. That is why shopping around with several lenders is worth the effort.
What About the Down Payment?
A larger down payment means a smaller loan, a lower monthly payment and less total interest. If you put down only 10% ($35,000) on the same $350,000 home, your loan becomes $315,000 and your principal and interest payment rises to about $1,991.01 per month, with roughly $401,765 paid in interest over 30 years. In many countries, a small down payment also triggers extra costs such as mortgage insurance, which this calculator does not include.
Costs the Calculator Does Not Include
- Private mortgage insurance (PMI) or similar insurance when your down payment is low
- Homeowners association (HOA) fees
- Maintenance and repairs, often estimated at 1% of the home value per year
- Utilities and, in some places, flood or other special insurance
- Closing costs such as lender fees, legal fees and transfer taxes, usually paid upfront
Property tax and insurance rates differ widely between regions, so use the figures that match the area you are considering.
Tips to Lower Your Mortgage Cost
- Improve your credit profile before applying to qualify for better rates.
- Compare offers from several lenders, not just your own bank.
- Save for a bigger down payment if possible.
- Consider a shorter term if you can afford the higher monthly payment.
- Ask whether you can make extra payments without penalty; they go directly to principal.
Frequently Asked Questions
How much house can I afford?
A common guideline is that your total monthly housing cost should not exceed about 28% of your gross monthly income, and your total debt payments should stay below roughly 36%. These are rules of thumb, not strict limits. Use the calculator with different prices to see what feels comfortable.
Is this calculator for fixed-rate mortgages only?
Yes. It assumes a fixed interest rate for the whole term. Adjustable-rate mortgages can change over time, so your real payments could be higher or lower.
Why is so much of my early payment interest?
Interest is charged on your remaining balance, which is highest at the start. In the early years most of each payment goes to interest, and the principal share slowly grows as the balance falls.
Should I include property tax and insurance?
Yes, because they are part of the real monthly cost of owning the home, and in many cases your lender collects them with your mortgage payment. If you want to see the loan alone, set tax and insurance to zero.
Can I use this for a car loan or personal loan?
For simple loans without tax and insurance, our Loan EMI Calculator is a better fit.
Saving for Your Down Payment?
See how regular saving can grow with our Compound Interest Calculator.
Disclaimer: Results from this calculator are estimates for informational purposes only and are not financial advice. Actual mortgage terms, taxes, insurance and fees vary by lender and location. Please consult a qualified mortgage professional before making borrowing decisions.