Mortgage Calculator
Monthly payment, total interest and smart tips
How Mortgage Payments Work
A mortgage payment covers both principal (the amount borrowed) and interest (the cost of borrowing). Early payments are mostly interest, while later payments go more toward principal.
Mortgage Formula
M = P[r(1+r)^n] / [(1+r)^n - 1] where M is monthly payment, P is principal, r is monthly rate, and n is total payments.
How to Save on Your Mortgage
A larger down payment reduces your loan amount and eliminates PMI. Choosing a 15-year term over 30-year saves significant interest. Even one extra payment per year can cut years off your mortgage.
Frequently Asked Questions
How much house can I afford?
A common guideline is that your monthly mortgage payment should not exceed 28% of your gross monthly income. Use this calculator to find the price range that fits your budget.
Should I choose a 15-year or 30-year mortgage?
A 15-year mortgage has higher monthly payments but much less total interest. A 30-year mortgage is more affordable monthly but costs significantly more over the life of the loan.
What is PMI?
Private Mortgage Insurance (PMI) is required when your down payment is less than 20%. It typically costs 0.5-1% of the loan amount annually. Putting 20% down eliminates this extra cost.
How does interest rate affect my payment?
Even a 0.5% difference in interest rate can mean tens of thousands of dollars over the life of a 30-year mortgage. Always shop around for the best rate.