What Is a Mortgage Calculator?
A mortgage calculator works out your exact monthly home loan payment from the home price, down payment, interest rate, and loan term. Ours goes a step further — it factors in property tax and home insurance too, so you see your complete PITI (Principal, Interest, Taxes, Insurance) payment, along with a full year-by-year amortization schedule showing how your loan balance drops over time.
Most people run these numbers before they commit to a loan — whether they're buying their first home, refinancing, or investing in property. According to the Consumer Financial Protection Bureau (CFPB), comparing offers from at least three lenders can save the average borrower over $3,000 over the life of a loan — and knowing your payment upfront gives you the leverage to negotiate.
How to Use This Calculator
- Home Price — Enter the purchase price or current market value of the home
- Down Payment — Enter your upfront cash payment (20% avoids PMI on conventional loans)
- Annual Interest Rate — Enter the APR quoted by your lender; check live rates at Freddie Mac PMMS
- Loan Term — 30 years is most common; 15 years saves roughly $277,000 in total interest on a $350K loan
- Property Tax — Enter your estimated annual property tax (average US rate: ~1.1% of home value)
- Home Insurance — Enter annual homeowner's insurance premium (average US: ~$1,200–$2,400/year)
- Click "Calculate My Mortgage Payment" to see your complete monthly cost and amortization table
Mortgage Payment Formula
Every fixed-rate mortgage uses the standard amortization formula to calculate your monthly principal and interest payment:
Understanding PITI — Your True Monthly Cost
Your real monthly mortgage payment is more than just principal and interest. Lenders, insurers, and local government all add costs that together make up PITI:
| Component | What It Is | Typical Monthly Cost | Who Gets It |
|---|---|---|---|
| Principal (P) | Reduces your outstanding loan balance | Increases over time | Builds your equity |
| Interest (I) | Lender's charge for borrowing the money | Decreases over time | Lender |
| Property Tax (T) | Annual property tax ÷ 12, held in escrow | $200–$1,000+/month | Local government |
| Insurance (I) | Homeowner's insurance + PMI if applicable | $100–$400/month | Insurance company |
Types of Mortgages in the USA
| Mortgage Type | Rate | Down Payment | Best For |
|---|---|---|---|
| 30-Year Fixed | Fixed | 3–20% | Long-term owners who want predictable payments |
| 15-Year Fixed | Fixed | 3–20% | Faster payoff; saves ~$277K in interest vs 30yr on $350K loan |
| 5/1 ARM | Fixed 5yr, then adjustable | 3–20% | Buyers who plan to sell or refinance within 5–7 years |
| FHA Loan | Fixed or ARM | 3.5% (580+ score) | First-time buyers with lower credit scores |
| VA Loan | Fixed or ARM | 0% | Veterans, active military, and surviving spouses |
| USDA Loan | Fixed | 0% | Rural area buyers with qualifying income |
| Jumbo Loan | Fixed or ARM | 10–20% | Homes above the conforming loan limit (varies by county — check current FHFA limits) |
Down Payment — How Much Do You Really Need?
| Down Payment | Loan Type | PMI Required? | Monthly PMI (on $360K loan) |
|---|---|---|---|
| 3% | Conventional (Fannie/Freddie) | Yes | ~$150/month |
| 3.5% | FHA | Yes (MIP, usually lifetime) | ~$145/month |
| 10% | Conventional | Yes | ~$100/month |
| 20% | Any conventional | No ✅ | $0 |
| 0% | VA or USDA | No (funding fee instead) | $0 |
A traditional 20% down payment avoids PMI and gives you instant equity. But saving 20% on a $400,000 home means putting aside $80,000 first — which can take years and delays building equity through appreciation. Many buyers reasonably choose 5–10% down and pay PMI instead, especially in rising markets where the cost of waiting outweighs the cost of PMI.
The 28/36 Rule — How Much Home Can You Afford?
The 28/36 rule is the standard guideline most US mortgage lenders use: your monthly PITI payment shouldn't exceed 28% of gross monthly income, and total monthly debt payments (housing + car + student loans + credit cards) shouldn't exceed 36%.
| Gross Monthly Income | Max Housing (28%) | Max All Debt (36%) | Approx Home Price (7%, 20% down, 30yr) |
|---|---|---|---|
| $5,000/month ($60K/yr) | $1,400 | $1,800 | ~$175,000 |
| $7,500/month ($90K/yr) | $2,100 | $2,700 | ~$265,000 |
| $10,000/month ($120K/yr) | $2,800 | $3,600 | ~$355,000 |
| $15,000/month ($180K/yr) | $4,200 | $5,400 | ~$530,000 |
| $20,000/month ($240K/yr) | $5,600 | $7,200 | ~$710,000 |
15-Year vs 30-Year Mortgage — True Cost Comparison
A 15-year and a 30-year mortgage on the same loan amount play out very differently — not just in the monthly payment, but in total interest paid and how soon you own the home outright. Here's the comparison on a $350,000 loan, using representative rates:
| Factor | 15-Year Mortgage | 30-Year Mortgage |
|---|---|---|
| Sample Interest Rate | ~6.25% | ~6.75% |
| Monthly Payment (P&I) | $3,001 | $2,270 |
| Monthly Difference | +$731/month for 15-year | |
| Total Interest Paid | $190,180 | $467,200 |
| Interest Saved | $277,020 saved with 15-year | |
| Equity at Year 5 | ~$110,000 | ~$42,000 |
| Time to Payoff | 15 years | 30 years |
The 15-year saves $277,000 in interest but costs $731 more per month. If that extra $731 could reliably earn more than 6.75% invested elsewhere, the 30-year math can actually favor investing the difference instead. For most people, though, the guaranteed "return" of a faster payoff and owning the home outright 15 years sooner makes the 15-year the more compelling choice.
The Power of Extra Payments on Your Mortgage
Extra principal payments make a bigger dent in total interest than most people expect. On a $350,000 mortgage at 7% for 30 years (monthly P&I: $2,329):
| Extra Monthly Payment | Interest Saved | Loan Shortened By | Total Loan Term |
|---|---|---|---|
| $0 (base only) | — | — | 30 years |
| +$100/month | ~$31,000 | ~3 years | ~27 years |
| +$200/month | ~$57,000 | ~6 years | ~24 years |
| +$500/month | ~$110,000 | ~12 years | ~18 years |
| One extra payment/year | ~$45,000 | ~4.5 years | ~25.5 years |
5 Mortgage Tips to Save Thousands
- Shop at least 3 lenders before committing — even a 0.5% rate difference on a $350,000 loan saves over $35,000 over 30 years. Compare your bank, a credit union, and at least one online lender
- Improve your credit score before applying — going from 680 to 740 can reduce your rate by 0.5–1%, saving tens of thousands. Pay down credit cards to below 30% utilization 6 months before applying
- Get pre-approved before house hunting — sellers take pre-approved buyers more seriously, and it shows you your real budget before you fall in love with a home you can't afford
- Consider buying mortgage points — 1 point costs 1% of the loan upfront and reduces the rate by ~0.25%. If you plan to stay 7+ years, buying points usually saves more than the upfront cost
- Never skip the home inspection — a $400–$600 inspection can reveal $20,000–$100,000 in repairs that change the true cost of the purchase
Reference: CFPB Rate Explorer | Freddie Mac Rate Survey | HUD Free Housing Counseling