How to use this mortgage calculator
Enter three numbers: the loan amount (the amount you're borrowing after your down payment), the annual interest rate, and the term in years. The result updates instantly as you type, showing your estimated monthly payment plus the total you'll repay and how much of that is interest. Start with what you can put down using the down payment calculator.
The formula explained
A fixed-rate mortgage is repaid in equal monthly installments. The payment is calculated as:
M = P × r ÷ (1 − (1 + r)−n)
where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly payments (years × 12). Early payments are mostly interest; as the balance falls, more of each payment goes toward principal. The payment split over time is laid out by the amortization calculator.
Worked example
On a $300,000 loan at 6.5% over 30 years (360 months), the monthly rate is 0.0054167. The payment works out to about $1,896 per month. Over the full term you'd repay roughly $682,600 — meaning about $382,600 is interest. Shortening the term to 15 years raises the payment but slashes total interest dramatically. Lenders will also check the result against your debt-to-income ratio.
What this figure does and doesn't include
This calculator shows principal and interest only. Your real monthly housing cost usually also includes property tax, homeowner's insurance, and sometimes HOA fees or private mortgage insurance (PMI). Lenders bundle these into an escrow payment, so your actual bill may be several hundred dollars higher.
How to lower your monthly payment
- Bigger down payment — borrow less, pay less.
- Longer term — lowers the monthly payment but increases total interest.
- Lower interest rate — shop lenders or improve your credit score before applying.
- Remove PMI — once you reach 20% equity.
Frequently asked questions
- Does this include taxes and insurance?
- No. It shows principal and interest only. Property tax, insurance, PMI and HOA fees are added on top by your lender.
- How much interest will I pay overall?
- The calculator shows total interest in the result. On a typical 30-year loan, total interest can exceed the original loan amount at higher rates.
- Is a 15-year or 30-year mortgage better?
- A 15-year term has higher monthly payments but far less total interest. A 30-year term is more affordable monthly but costs much more over time.
- What interest rate should I enter?
- Use a current quoted rate from a lender. Even a 0.5% difference noticeably changes both your monthly payment and total interest.
- What if my rate is variable or I overpay?
- This assumes a fixed rate and equal payments for the whole term, so an adjustable rate or extra principal payments will change the outcome. Re-run it with a different rate or a shorter term to approximate them. All results are an estimate for general information, not financial advice.