Mortgage Calculator
A fixed-rate mortgage payment is M = P × r ÷ (1 - (1 + r)^-n), where P is the loan amount, r the monthly interest rate and n the number of payments. A $425,000 home with 20% down at 6.4% over 30 years costs $2,127 a month in principal and interest, and $425,619 in total interest.
| Year | Principal | Interest | Balance |
|---|---|---|---|
| Year 1 | $3,873 | $21,648 | $336,127 |
| Year 2 | $4,128 | $21,392 | $331,999 |
| Year 3 | $4,400 | $21,120 | $327,599 |
| Year 4 | $4,690 | $20,830 | $322,908 |
| Year 5 | $4,999 | $20,521 | $317,909 |
| Year 6 | $5,329 | $20,192 | $312,580 |
| Year 7 | $5,680 | $19,840 | $306,900 |
| Year 8 | $6,055 | $19,466 | $300,845 |
| Year 9 | $6,454 | $19,067 | $294,391 |
| Year 10 | $6,879 | $18,642 | $287,512 |
| Year 11 | $7,332 | $18,188 | $280,180 |
| Year 12 | $7,816 | $17,705 | $272,364 |
| Year 13 | $8,331 | $17,190 | $264,033 |
| Year 14 | $8,880 | $16,641 | $255,153 |
| Year 15 | $9,465 | $16,055 | $245,688 |
| Year 16 | $10,089 | $15,431 | $235,598 |
| Year 17 | $10,754 | $14,766 | $224,844 |
| Year 18 | $11,463 | $14,058 | $213,381 |
| Year 19 | $12,219 | $13,302 | $201,163 |
| Year 20 | $13,024 | $12,497 | $188,139 |
| Year 21 | $13,882 | $11,638 | $174,257 |
| Year 22 | $14,797 | $10,723 | $159,459 |
| Year 23 | $15,773 | $9,748 | $143,687 |
| Year 24 | $16,812 | $8,708 | $126,875 |
| Year 25 | $17,920 | $7,600 | $108,954 |
| Year 26 | $19,101 | $6,419 | $89,853 |
| Year 27 | $20,360 | $5,160 | $69,493 |
| Year 28 | $21,702 | $3,818 | $47,790 |
| Year 29 | $23,133 | $2,388 | $24,658 |
| Year 30 | $24,658 | $863 | $0 |
Fixed-rate amortization: M = P × r ÷ (1 - (1 + r)^-n), with r the monthly rate and n the number of payments. Extra payments reduce principal.
How to use the Mortgage Calculator
- Enter the home price and your down payment as a percentage.
- Enter the annual interest rate.
- Choose a 15, 20 or 30-year term.
- Read the monthly payment, loan amount and total interest, and see how the total splits between principal and interest.
Formula
M = P × r ÷ (1 - (1 + r)^-n) where P = price × (1 - down %), r = annual rate ÷ 12, n = years × 12This is the standard fixed-rate amortization formula. Total interest is M × n - P. The payment covers principal and interest only; property tax, homeowners insurance, PMI and HOA fees are extra.
What else goes into a monthly housing payment
- Property tax, often 1% to 2% of the home value a year, usually paid through escrow.
- Homeowners insurance.
- Private mortgage insurance (PMI) when the down payment is under 20% on a conventional loan.
- HOA dues for condos and some neighbourhoods.
Ways to pay less interest
- A shorter term: a 15-year loan has a higher payment but far less total interest.
- A bigger down payment lowers the loan amount and can remove PMI.
- Extra principal payments: an extra $100 a month on a $300,000, 30-year loan at 6.5% saves about $61,000 and ends the loan about 4 years early.
- A better rate through a higher credit score, or by paying points.
Mortgage Calculator questions
How is a monthly mortgage payment calculated?
The payment uses the amortization formula M = P × r ÷ (1 - (1 + r)^-n), with the loan amount P, monthly rate r and number of payments n. For a $340,000 loan at 6.4% over 30 years, that is $2,127 a month. Each payment covers that month's interest first, and the rest reduces the balance.
How much house can I afford with my salary?
A common guideline is to keep the total housing payment at or below 28% of gross monthly income, and all debt payments under about 36%. On a $60,000 salary that means a housing payment of roughly $1,400 a month, including taxes and insurance. Work backwards from that figure to a price.
What happens if I pay extra on my mortgage each month?
Extra payments go straight to principal, which cuts total interest and shortens the loan. Adding $100 a month to a $300,000, 30-year mortgage at 6.5% saves about $61,000 in interest and pays it off about four years early. Check that your lender has no prepayment penalty.
How much do I need for a down payment?
Down payments usually range from 3% to 20% of the price. Conventional loans can start at 3% to 5%, and FHA loans at 3.5%. Putting down 20% avoids private mortgage insurance on a conventional loan and lowers both the loan amount and the monthly payment.
What is PMI and when can I remove it?
Private mortgage insurance protects the lender when you put down less than 20% on a conventional loan, and typically costs 0.3% to 1.5% of the loan a year. You can ask to cancel it when your balance reaches 80% of the home's original value, and it ends automatically at 78%.
Is a 15-year or 30-year mortgage better?
A 15-year mortgage costs much less interest and usually has a lower rate, but the monthly payment is higher. A 30-year mortgage keeps payments affordable and flexible. If the 15-year payment fits comfortably in your budget, it builds equity far faster.
What is the difference between fixed and adjustable rates?
A fixed-rate mortgage keeps the same rate and principal-and-interest payment for the whole term. An adjustable-rate mortgage (ARM) starts with a fixed period, often 5 or 7 years, then resets periodically with market rates, so the payment can rise. This calculator models fixed-rate loans.
How does my credit score affect my mortgage rate?
Higher scores get lower rates. Borrowers around 740 and above usually see the best pricing, while scores below about 620 may need an FHA loan or pay a higher rate. On a $300,000, 30-year loan, a 1 percentage point higher rate adds about $200 a month.
Should I refinance if rates drop?
Refinancing often makes sense when you can cut your rate by about 0.75 to 1 percentage point and will stay in the home long enough to recover closing costs, which typically run 2% to 5% of the loan. Divide the closing costs by the monthly saving to find your break-even point.
What closing costs should I expect?
Closing costs typically run 2% to 5% of the loan amount and include lender fees, appraisal, title insurance and prepaid taxes and insurance. On a $300,000 loan that is roughly $6,000 to $15,000. Ask for a Loan Estimate to compare lenders line by line.