Mortgage Calculator
Calculate your monthly mortgage payment with taxes, PMI, and a full amortization schedule.
$80,000
Additional Costs
$2,528.97
per month for 30 years
Loan Amount
$320,000
Total Interest
$446,428
Total P&I Paid
$766,428
Down Payment
$80,000
Formula
The calculator uses the standard amortization formula to determine your monthly payment:
M = P × [r(1+r)^n] / [(1+r)^n - 1]
Where M = monthly payment, P = loan principal, r = monthly interest rate, n = number of payments
Worked Example
Suppose you buy a $400,000 home with a 20% down payment ($80,000) at 7% interest over 30 years:
- Loan amount: $320,000
- Monthly interest rate: 7% ÷ 12 = 0.583%
- Monthly payment (P&I): $2,133
- Property tax (at 1.2% annually): $400/month
- Total monthly payment: $2,533
- Total principal and interest paid over 30 years: $766,430
- Total interest paid: $446,430
Common Questions
What is PMI?
Mortgage Insurance (PMI) is required when your down payment is less than 20%. It protects the lender if you default. This calculator estimates PMI at 0.5% annually on the loan amount.
How does property tax work?
Property tax rates vary by location (typically 0.5%–2.5% annually). Check your local tax assessor's website for your area's rate. This amount is included in your total monthly payment if paid through escrow.
What's the difference between fixed and adjustable rates?
This calculator assumes a fixed rate (stays the same for 30 years). Adjustable-rate mortgages (ARMs) start low but can increase after 5–7 years, raising your payment.
Can I pay off my mortgage early?
Yes. The amortization schedule shows how much of each payment goes to principal vs. interest. Extra principal payments shorten the loan term and save interest.
Key Takeaways
- A larger down payment (20%+) eliminates PMI and lowers your monthly payment.
- Even a 0.5% difference in interest rate significantly changes your total interest paid — shop around with multiple lenders.
- Property taxes, insurance, and HOA fees often add 20–30% to your base principal-and-interest payment.
- Use the amortization schedule to see how slowly principal decreases in early years (most of each payment is interest).
Use this calculator when: you're shopping for a home and want to understand your monthly costs before applying for a loan, you're refinancing and want to compare new rates, you're considering a larger down payment and want to see the impact, or you want to understand how different loan terms (15 vs 30 years) affect your payment.
This calculator is most accurate for fixed-rate mortgages. Adjustable-rate mortgages (ARMs) will have changing rates, which this tool doesn't model.
- Forgetting property tax and insurance: Your monthly payment isn't just principal and interest. Property tax, insurance, and HOA often add 20–30% to your base payment. Budget for the total.
- Assuming 20% down is required: It's not. You can put down 3-10% if you have good credit and income. The trade-off is paying PMI, which is annoying but not a dealbreaker.
- Ignoring the interest breakdown: In year 1, 87% of your payment goes to interest, not principal. Don't expect fast equity buildup early on.
- Overextending on price: Just because you're approved for $500k doesn't mean you should borrow it. Use this calculator to ensure your monthly payment is comfortable for 30 years, not just year 1.
- Shop rates across 3-5 lenders: A 0.5% difference in rates costs you ~$38,000 in total interest on a $320k loan over 30 years. It's worth spending a day comparing offers.
- Consider a 15-year mortgage if possible: Your payment is ~1.3x higher, but you pay less than half the interest and build equity twice as fast. It's a personal choice based on cash flow.
- Make extra principal payments early: If you can afford an extra $100/month in year 5, do it then, not year 25. Each dollar goes entirely to principal, compounding into massive savings.
- Refinance when rates drop 0.5%+: If rates fall 0.5% or more below your current rate, refinancing usually pays for itself in 3-5 years through interest savings.