Mortgage Calculator
Estimate your monthly mortgage payment by entering the loan amount, annual interest rate, and loan term in years. The result shows the fixed principal-and-interest payment you would make each month.
Monthly Mortgage Payment Estimator
Mortgage Monthly Payment Formula
Where:
- \(P\) — principal loan amount (the amount borrowed)
- \(r\) — monthly interest rate (annual rate divided by 12)
- \(n\) — total number of monthly payments (loan term in years × 12)
This is the standard amortizing loan formula: it converts a lump-sum loan into a series of equal monthly payments such that the present value of all payments equals the principal. If the interest rate is 0, the payment simplifies to \(P / n\).
Mortgage Calculator – Calculation Example
Example: you borrow $300,000 at an annual interest rate of 4.5% with a 30-year term.
\[ r = \frac{4.5\%}{12} = 0.00375, \quad n = 30 \times 12 = 360 \]
\[ \text{Monthly Payment} = \frac{300{,}000 \times 0.00375}{1 - (1.00375)^{-360}} = \frac{1{,}125}{0.7401} \]
Result: the monthly payment is about $1,520.06. Over 360 payments you would repay roughly $547,222 in total, of which about $247,222 is interest.
How to Use the Mortgage Calculator
- Enter the Loan Amount (P) — the total price of the home minus your down payment.
- Enter the Annual Interest Rate quoted by your lender, as a percentage (for example, 4.5 for 4.5%).
- Enter the Loan Term (Years) — the repayment period, commonly 15, 20, or 30 years.
- Read the Monthly Payment result, which covers principal and interest only.
What Is a Mortgage Payment?
A mortgage payment is the fixed amount you pay your lender each month to gradually repay a home loan. With a standard fixed-rate mortgage, this payment stays the same for the entire term, but its composition changes over time: early payments are mostly interest, while later payments are mostly principal. This process of gradually paying off the balance is called amortization.
Three factors determine the payment size. A larger loan amount (\(P\)) raises it. A higher interest rate (\(r\)) raises it significantly, because interest is charged on the outstanding balance every month. A longer term (\(n\)) lowers the monthly payment but increases the total interest paid over the life of the loan — on the example above, nearly $250,000 of the ~$547,000 repaid is interest.
The result from this calculator is the principal-and-interest (P&I) payment. Your full monthly housing cost may also include property taxes, homeowners insurance, and, if your down payment is below 20%, private mortgage insurance (PMI). Lenders combine all of these into the PITI payment (Principal, Interest, Taxes, Insurance), which is what they use when assessing whether you qualify.
Assumptions and Limitations
- Fixed rate only. The formula assumes the interest rate never changes. Adjustable-rate mortgages (ARMs) recalculate the payment whenever the rate resets, so this calculator does not model them.
- Principal and interest only. Taxes, insurance, PMI, HOA fees, and closing costs are not included.
- Equal monthly payments. The schedule assumes payments are made on time, every month, with no extra payments. Paying extra toward principal shortens the loan and cuts total interest, but the required payment stays the same.
- Rate is divided by 12. The monthly rate is treated as the annual rate ÷ 12, which is the standard convention for US mortgages.
Practical Tips
Shortening the term is one of the most powerful ways to reduce the total cost of a loan. Compare the same loan at 15 and 30 years: the 15-year payment is higher, but you may save well over $100,000 in interest. Even one extra payment per year on a 30-year mortgage can cut roughly 4–6 years off the term.
A small difference in the interest rate matters. On a $300,000 30-year loan, the difference between 4.5% and 5.0% is about $91 per month — more than $32,000 over the full term. This is why comparing offers from several lenders, and considering whether buying mortgage discount points to lower the rate makes sense, can pay off substantially. To evaluate the full cost of a loan including fees, use our Mortgage APR Calculator.
Related tools: the Mortgage Payment Calculator breaks down how each payment splits between principal and interest, the general Loan Calculator works for any amortizing loan, and the Auto Loan Calculator applies the same math to car financing.
Sample Monthly Payments on a $300,000 Loan
| Rate | 15 years | 30 years |
|---|---|---|
| 3.5% | $2,144.65 | $1,347.13 |
| 4.5% | $2,294.98 | $1,520.06 |
| 5.5% | $2,451.22 | $1,703.37 |
| 6.5% | $2,613.30 | $1,896.20 |
Notice that the 15-year payment is only about 50% higher than the 30-year payment, while the total interest paid is far less — a useful trade-off to weigh when choosing a term.
Frequently Asked Questions
Why is my actual mortgage payment higher than the calculator's result?
The calculator shows principal and interest only. Your lender's monthly bill usually also includes escrow amounts for property taxes, homeowners insurance, and PMI if your down payment is under 20% — together these form the PITI payment. On a $300,000 loan, taxes and insurance can easily add $300–$600 or more per month depending on your location, so expect your real payment to be higher than the P&I figure.
What is a good rule of thumb for how much of my income should go to a mortgage?
A common guideline is that total housing costs (PITI) should stay below 28% of your gross monthly income, and total debt payments below 36% — the classic 28/36 rule. Some lenders allow ratios up to 43–50% on qualified loans, but stretching that far leaves little room for emergencies. Treat these as ceilings, not targets, and consider your full budget before committing.
What is a common mistake when calculating a mortgage payment by hand?
The most frequent error is using the annual interest rate instead of the monthly rate. You must divide the annual rate by 12 first: 4.5% per year becomes 0.045 ÷ 12 = 0.00375 per month. Another mistake is forgetting to convert the term to months — a 30-year loan is 360 payments, not 30. Getting either wrong can throw the result off by orders of magnitude.
Why is so much of my early payment interest, and when does that shift?
Interest each month is charged on the outstanding balance, which is largest at the start. On a 30-year loan at 4.5%, roughly 70% of your first payment is interest. The split gradually shifts toward principal as the balance shrinks; the crossover point where principal exceeds interest typically occurs a bit past the halfway point of the term. This is also why selling or refinancing early means you've built less equity than you might expect.
How do extra principal payments affect my loan?
Extra payments reduce your balance immediately, so less interest accrues each month and the loan pays off sooner. The required monthly payment stays the same — you're shortening the term, not lowering the payment. On a 30-year mortgage, one extra payment per year can cut roughly 4–6 years off the term. Check that your loan has no prepayment penalty, and tell your servicer to apply extras to principal, not the next payment.
Can I use this calculator for an adjustable-rate mortgage (ARM)?
Not accurately. The formula assumes the rate never changes, while an ARM's rate resets periodically after the initial fixed period, and the payment is recalculated each time. You can approximate a worst case by running the calculator with the maximum rate your ARM can adjust to, but for a real picture of ARM payments over time you need an amortization schedule that models each rate reset.
How does the loan amount I enter relate to the home price?
Enter the amount you're borrowing, not the price of the house. That's the purchase price minus your down payment: on a $350,000 home with 20% down ($70,000), the loan amount is $280,000. A down payment of at least 20% also avoids PMI, which typically costs 0.5–1.5% of the loan amount per year until you reach sufficient equity.