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Mortgage Calculator

Monthly payments, total interest and full amortization schedule

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Total interest paid$0
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Monthly P&I
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Total Interest
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Total Paid
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YearPrincipal PaidInterest PaidBalance Remaining
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Max Home Price (28% rule)
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Max monthly payment$0
Max loan amount$0
DTI ratio (36% rule)0%
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Interest Saved
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Paid off sooner
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Standard total interest$0
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Monthly Savings
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Current payment$0
New payment$0
Total interest (current)$0
Total interest (new)$0
Net lifetime savings$0

How to Calculate Your Mortgage Payment

A mortgage is typically the largest financial commitment most people make. Understanding exactly what you'll pay — and how much of that is interest — helps you make smarter decisions about loan terms, down payments, and whether to refinance. This calculator handles all four common mortgage questions instantly.

Homebuyers use this tool to compare 15-year vs 30-year loans, see the true cost of a low down payment, or decide whether that extra $200/month makes a meaningful dent in their loan. Homeowners use it to evaluate refinancing options or accelerate payoff.

Mortgage Payment Formula

M = P × [r(1+r)^n] / [(1+r)^n − 1]
Where P = loan amount, r = monthly interest rate (annual ÷ 12), n = total months.
Example: $280,000 at 6.75% for 30 years → M = $1,815/month in principal & interest.

The 28/36 Affordability Rule

Lenders generally want your housing costs (PITI) to stay under 28% of gross monthly income, and total debt under 36%. On a $7,500/month income: max housing = $2,100, max total debt = $2,700.

When to Use This Calculator

The mortgage calculator is most valuable when used proactively — before a decision is made — rather than just to confirm numbers after the fact:

  • Shopping for a home: Before making an offer, calculate your maximum affordable price using the Affordability tab. On a $7,500/month gross income, the 28% rule allows $2,100/month for housing (PITI). At 6.75%, that supports a ~$310,000 loan — meaning a $380,000 home requires a $70,000 down payment.
  • Choosing between 15-year and 30-year: A $280,000 mortgage at 6.75%: 30-year = $1,815/month, $373,400 total interest. 15-year = $2,482/month, $166,760 total interest. The 15-year saves $206,640 but costs $667 more per month. Is that trade-off worth it for your budget?
  • Refinancing decision: If you have a $250,000 balance at 7.5% with 25 years remaining and can get 6.25% for 30 years: monthly savings = $173, closing costs = $4,000, break-even = 23 months. If you plan to stay 3+ years, refinancing makes sense.
  • Extra payment strategy: On a $280,000 30-year mortgage at 6.75%, adding just $200/month extra saves approximately $58,000 and shortens the loan by 5 years.

Step-by-Step Mortgage Payment

Home: $350,000 | Down: $70,000 | Loan: $280,000 | Rate: 6.75% | Term: 30 years

Step 1 — Monthly rate: 6.75% ÷ 12 = 0.5625% (0.005625)
Step 2 — n = 30 × 12 = 360 months
Step 3 — P&I = $280,000 × [0.005625 × (1.005625)^360] / [(1.005625)^360 − 1] = $1,815/month
Step 4 — Add property tax ($3,500/yr = $292/mo) + insurance ($1,200/yr = $100/mo)
Step 5 — Total PITI = $1,815 + $292 + $100 = $2,207/month
Step 6 — Total interest over 30 years: $1,815 × 360 − $280,000 = $373,400

Frequently Asked Questions

How is a monthly mortgage payment calculated? ▼
Monthly payment M = P × [r(1+r)^n] / [(1+r)^n − 1]. P = loan principal, r = monthly interest rate (annual rate ÷ 12), n = number of months. This formula distributes payments so each covers accrued interest plus a growing slice of principal, ensuring the loan is fully paid at term end.
Is a 15-year or 30-year mortgage better? ▼
A 15-year mortgage has a higher monthly payment but saves dramatically on interest — often 50% or more of total interest paid. A 30-year mortgage offers lower monthly payments and more financial flexibility. The right choice depends on your income stability, investment opportunities, and how long you plan to stay in the home.
How much do extra payments save on a mortgage? ▼
Extra payments go directly to principal, reducing the balance on which future interest accrues. On a $280,000 30-year mortgage at 6.75%, an extra $200/month saves approximately $58,000 in interest and shortens the loan by about 5 years. Use the Extra Payments tab to calculate your exact savings.
How much mortgage can I qualify for? ▼
Lenders use two key ratios: front-end DTI (housing costs ÷ gross income) should be ≤28%, and back-end DTI (total debt ÷ gross income) should be ≤36-43%. Your credit score, employment history, and down payment also heavily influence the loan amount. Use the Affordability tab for an estimate.
When should I refinance my mortgage? ▼
Refinancing typically makes financial sense when: (1) you can reduce your rate by at least 0.5%, (2) you plan to stay long enough to recover closing costs, (3) you want to switch from an ARM to a fixed rate, or (4) you want to cash out equity. Use the Refinance tab to find your exact break-even point.
What is the 20% down payment rule? ▼
Putting less than 20% down usually requires Private Mortgage Insurance (PMI), which costs 0.5–1.5% of the loan amount annually. On a $300,000 loan, PMI could add $1,500–$4,500 per year until you reach 20% equity. A larger down payment also reduces your loan amount and monthly payment.
What is an adjustable-rate mortgage (ARM) and how does it compare to a fixed rate? ▼
An ARM has an initial fixed period (commonly 5, 7, or 10 years) followed by annual rate adjustments tied to a benchmark index (usually SOFR). A 5/1 ARM: fixed for 5 years, adjusts annually thereafter. ARMs typically start lower than fixed rates — useful if you plan to sell or refinance before the adjustment period begins. The risk: if rates rise significantly, your payment can jump substantially. A fixed-rate mortgage provides certainty for long-term homeowners. Compare using the monthly savings in the fixed period against the potential worst-case payment increase after adjustments begin.
How much are typical closing costs on a mortgage? ▼
Closing costs typically run 2–5% of the loan amount — on a $300,000 mortgage, expect $6,000–$15,000. Key components: origination fee (0.5–1% of loan), appraisal ($300–$600), title insurance ($1,000–$2,500), attorney/settlement fees ($500–$1,500), recording fees ($50–$500), prepaid items (property taxes, homeowner's insurance, prepaid interest). Some lenders offer "no-closing-cost" mortgages in exchange for a slightly higher rate — useful if you plan to sell within 5 years. Always request a Loan Estimate document to compare total costs across lenders.
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