Mortgage Calculator
Calculate your monthly mortgage payment including principal, interest, taxes, insurance, and PMI. Get a full amortization schedule and compare loan options.
$80,000 (20.0%)
Total Monthly Payment
$2,679/mo
Principal & Interest
$2,129
Property Tax
$400
Insurance
$150
Payment Breakdown
Loan Details
Loan Amount
$320,000
Down Payment
$80,000 (20.0%)
Total Interest
$446,428
Total Paid (P+I)
$766,428
Total With All Costs
$964,428
Payoff Date
May 2056
Affordability Metrics
20% Down (No PMI)
$80,000
Closing Costs (2–5%)
$8,000 – $20,000
Recommended Income (28% rule)
$114,813/yr
Principal vs Interest Over Time
💡 What If I Pay Extra?
Compare Mortgage Rates
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How Mortgage Payments Are Calculated
A mortgage payment has two core parts: principal (the amount you borrowed) and interest (cost of borrowing). Together they're called P&I.
The monthly P&I is calculated using the amortization formula:
M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1]
P = loan amount, r = monthly rate, n = total months
Amortization means interest is front-loaded — during the first years, most of your payment goes toward interest. Over time, more goes to principal. This is why extra payments in the early years save the most money.
Fixed vs ARM: Fixed-rate mortgages keep the same rate for the entire term. Adjustable-rate mortgages (ARMs) start with a lower rate that can change after an initial period (e.g., 5/1 ARM = fixed for 5 years, then adjusts annually).
Understanding Mortgage Components
| Component | Typical Cost | Details |
|---|---|---|
| Principal & Interest | Varies | The core loan repayment — determined by loan amount, rate, and term |
| Property Taxes | 1–2% of home value/yr | Varies widely by location; held in escrow by lender |
| Home Insurance | $1,000–$2,500/yr | Covers damage, theft, liability; required by lender |
| PMI | 0.5–1% of loan/yr | Required if down payment < 20%; drops at 80% LTV |
| HOA Fees | $0–$500+/mo | Condos, townhomes, planned communities; covers shared amenities |
Down Payment Guidelines
| Down Payment | PMI? | Notes |
|---|---|---|
| 20%+ | No PMI ✓ | Best rates, lowest monthly payment, no extra insurance |
| 10–19% | PMI required | Good rates; PMI drops once you reach 80% LTV |
| 5–9% | Higher PMI | Conventional loans; slightly higher rates possible |
| 3–3.5% | Highest PMI | FHA loans (3.5%), some conventional (3%); first-time buyer programs |
15-Year vs 30-Year Mortgage
15-Year: Higher monthly payment (roughly 40–50% more), but dramatically less total interest. You build equity twice as fast and own your home sooner. Best for those who can comfortably afford the higher payment.
30-Year: Lower monthly payment, more payment flexibility, but you pay significantly more interest over time. The extra cash flow can be invested elsewhere. Most popular option in the US (~90% of mortgages).
Example on $320K loan at 7%: 15-year P&I ≈ $2,878/mo, total interest ≈ $198K. 30-year P&I ≈ $2,129/mo, total interest ≈ $446K. The 15-year saves ~$248K but costs $749 more per month.
How to Get the Best Mortgage Rate
• Improve your credit score — 740+ gets the best rates. Pay down debt, avoid new credit inquiries, fix errors on your report.
• Save a larger down payment — 20%+ avoids PMI and signals lower risk to lenders.
• Buy discount points — each point costs 1% of the loan and lowers the rate ~0.25%. Worth it if you're staying 5+ years.
• Shop multiple lenders — get at least 3–5 quotes. Rates can vary 0.5%+ between lenders, saving thousands.
• Choose the right loan type — FHA, VA, USDA, conventional, and jumbo loans all have different rate structures.
• Lock your rate — once you find a good rate, lock it in. Rate locks typically last 30–60 days.
Tips to Pay Off Your Mortgage Faster
• Make extra principal payments — even $100–200/month can save tens of thousands in interest and years off your loan.
• Bi-weekly payments — pay half your monthly amount every 2 weeks. This equals 26 half-payments = 13 full payments per year (one extra).
• Refinance to a shorter term — if rates drop, refinancing from 30-year to 15-year can save massively.
• Apply windfalls to principal — tax refunds, bonuses, and unexpected income can accelerate payoff significantly.
• Round up payments — round your payment up to the nearest $100. Small extra amounts compound over time.
• Recast your mortgage — after a large lump-sum payment, some lenders will re-amortize (lower your required monthly payment).