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🏠 Mortgage Calculator

A Mortgage Calculator is a free online tool that estimates monthly payments for a home loan. Enter the loan amount, interest rate, and term to see your payment, total interest, and cost breakdown. It runs entirely in your browser, so data stays private and no signup is required. Home buyers and real estate agents use it to compare loan options.

Enter loan amount, interest rate and term to calculate monthly payment.

Total Loan Amount

Annual Interest Rate (%)

Loan Term (years)

What is this tool?

A mortgage is a long-term loan used to purchase real estate, in which the property itself serves as collateral. The Mortgage Calculator estimates your monthly payment based on the loan amount (principal), interest rate, and loan term, giving you a clear picture of affordability before you commit. Mortgages are the largest financial obligation most households will ever take on, so understanding how the numbers interact is essential. The modern amortized mortgage became widespread in the United States during the 1930s, when the Federal Housing Administration (FHA) introduced the 30-year fixed-rate loan to make homeownership accessible. Since then, mortgages have evolved to include adjustable-rate, government-backed (VA, USDA), and conventional loans. This calculator focuses on the core mechanics shared by all fixed-rate mortgages: how much you borrow, the annual interest rate, and how long you take to repay. By adjusting these inputs, you can compare scenarios, see how a larger down payment or shorter term affects monthly cost and total interest, and plan your budget with confidence.

How it works

Monthly payment M = P × r × (1+r)^n / ((1+r)^n − 1), where P is the loan principal, r is the monthly interest rate (annual rate / 12), and n is the number of monthly payments (term in years × 12). Example: a $300,000 loan at 6.5% annual interest for 30 years gives r = 0.005417 and n = 360, so M ≈ $1,896. Total repaid ≈ $682,633.

Worked Example

Here is a step-by-step example so you can see exactly how the tool arrives at its result.

Input values

Loan amount (P) = $300,000, annual interest rate = 6.5%, term = 30 years.

Convert to monthly values

Monthly rate r = 6.5% ÷ 12 = 0.5417% = 0.005417. Number of payments n = 30 × 12 = 360.

Monthly payment formula

M = 300,000 × [0.005417 × (1.005417)³⁶⁰] ÷ [(1.005417)³⁶⁰ − 1] = 300,000 × [0.005417 × 6.991] ÷ [5.991] = $1,896

Result

Monthly payment = $1,896. Total repaid = $1,896 × 360 = $682,633. Total interest = $682,633 − $300,000 = $382,633.

Reference Table

Loan Amount	Rate	Term	Monthly Payment	Total Interest
$200,000	6.5%	30 yr	$1,264	$255,040
$300,000	6.5%	30 yr	$1,896	$382,640
$400,000	6.5%	30 yr	$2,528	$510,178
$300,000	6.0%	15 yr	$2,532	$155,680
$300,000	6.5%	15 yr	$2,613	$170,398

How to use

Enter the home price or total loan amount you plan to borrow.
Enter the annual interest rate as a percentage (e.g., 6.5 for 6.5%).
Enter the loan term in years — most common are 15, 20, or 30 years.
Optionally enter your down payment and, if known, annual property taxes and insurance for a fuller picture.
Click Calculate. The tool shows the monthly principal-and-interest payment, total interest paid over the life of the loan, and total cost. Adjust inputs to compare how rate, term, and down payment affect affordability.

Frequently Asked Questions

What is the difference between a fixed-rate and adjustable-rate mortgage (ARM)?

A fixed-rate mortgage keeps the same interest rate for the entire loan term, giving you predictable payments. An adjustable-rate mortgage (ARM) has a fixed introductory period (often 5, 7, or 10 years) after which the rate adjusts periodically based on market conditions. ARMs offer lower initial payments but carry the risk of higher payments later.

What is PMI, and when is it required?

Private Mortgage Insurance (PMI) protects the lender if you default, and is usually required on conventional loans when your down payment is less than 20% of the home price. PMI typically costs 0.3%–1.5% of the original loan per year and can be cancelled once your equity reaches 20%. It is separate from property taxes and homeowners insurance.

How does the down payment affect my loan?

A larger down payment reduces the principal you must borrow, lowering both your monthly payment and total interest. It may also help you qualify for a better interest rate and avoid PMI. However, tying up too much cash in a down payment can leave you short for closing costs, moving expenses, and an emergency fund.

Are property taxes and insurance included?

This calculator focuses on principal and interest to keep the math transparent. In reality, your lender may collect property taxes and homeowners insurance (and PMI, if applicable) through an escrow account, adding hundreds of dollars to your effective monthly payment — sometimes called PITI (Principal, Interest, Taxes, Insurance).

How much house can I afford?

A common rule of thumb is the 28/36 rule: spend no more than 28% of your gross monthly income on total housing costs (principal, interest, taxes, insurance, and HOA), and no more than 36% on all debt combined. On a $5,000 monthly income at 6.5% interest, a 30-year loan of roughly $222,000 keeps you inside that line. For a tailored estimate, use a House Affordability Calculator.

What is amortization?

Amortization is the process of paying off a loan in equal monthly installments. In the early years, most of each payment goes toward interest; over time, the balance shifts until the final payments are almost entirely principal. On a 30-year, $300,000 loan at 6.5%, only about $271 of the first $1,896 payment reduces principal.

15-year vs 30-year mortgage — which is better?

A 30-year term gives lower monthly payments but roughly twice the total interest. A 15-year term cuts interest dramatically — on a $300,000 loan at 6.5%, going from 30 to 15 years saves over $210,000 in interest while raising the payment by about $717 per month. Choose 15 years if you can comfortably afford it; choose 30 years for flexibility and make extra payments when possible.

How much are closing costs?

Closing costs typically run 2%–5% of the loan amount. On a $300,000 mortgage, expect $6,000–$15,000 in origination fees, title insurance, appraisal, survey, recording fees, and prepaid escrow. Some lenders offer no-closing-cost mortgages at a higher interest rate. Always request a Loan Estimate within three days of applying to compare costs.

What is the difference between pre-qualification and pre-approval?

Pre-qualification is a quick, informal estimate based on self-reported income and debt — no credit check. Pre-approval is a formal commitment from a lender after verifying income, assets, and credit. A pre-approval letter signals to sellers that you're a serious buyer and is often required before submitting an offer.

How can I lower my monthly mortgage payment?

Four main levers reduce your payment: a lower interest rate (improve credit score, buy points, or refinance), a longer term (30 instead of 15 years), a larger down payment (smaller principal), or removing PMI once equity reaches 20%. Even one extra payment per year can shave four to six years off a 30-year loan.

This tool is for informational purposes only and does not constitute financial advice. Consult a qualified financial professional for advice specific to your situation.

Tips & Advice

Even a small difference in interest rate can change what you pay over decades, so improving your credit score before applying can save tens of thousands. Shorter 15-year terms build equity faster and cost far less in interest, but require higher monthly payments — run both scenarios to find your comfort zone. Making one extra payment per year, or rounding up your payment, can shave years off a 30-year loan. Always compare Loan Estimates from at least three lenders, including rate, points, and fees, and factor in the full PITI plus maintenance when deciding what you can truly afford. Keep an emergency fund separate so a job loss or repair does not jeopardize your home.

For official mortgage guidance, visit the Consumer Financial Protection Bureau (CFPB).

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