When to use it
The mortgage calculator shows what a home loan will cost each month and over its whole life. Use it before house hunting to set a realistic budget, to compare a 15-year and a 30-year loan, to see how a bigger down payment or a lower rate changes things, or to check how much you could save by paying extra each month.
How to calculate a mortgage payment
- Choose your Currency.
- Enter the Home price and the Down payment, as an amount or as a percentage. The other updates automatically.
- Enter the Interest rate and choose the Loan term (10 to 30 years).
- Optionally open Taxes, insurance and fees to add Property tax / year, Insurance / year, HOA / month and an Extra payment / month.
- Read the Estimated monthly payment, plus the Loan amount, Total interest, Total of payments and the date the loan is Paid off by.
- Press Show under Yearly amortization schedule to see how much principal and interest you pay each year.
A worked example
A $400,000 home with $80,000 (20%) down leaves a $320,000 loan. At 6.5% over 30 years, the monthly payment is $2,022.62, and you’d pay $408,142 in interest, more than the loan itself. Add $4,800 a year property tax and $1,500 insurance, and the monthly total is $2,547.62. Now add an extra $200 a month: total interest drops to $302,714, and the loan is paid off about six years and seven months sooner.
What changes the cost most
- Interest rate: each 1% higher on a $320,000 loan adds roughly $200 a month and over $70,000 in interest over 30 years.
- Loan term: a 15-year loan has bigger payments but often less than half the total interest.
- Down payment: borrowing less lowers every payment, and 20% down usually avoids mortgage insurance.
- Extra payments: money paid early reduces the balance that interest is charged on.
Tips
- Use the full monthly cost, including tax, insurance and HOA, when setting a budget.
- Keep total housing costs to about 28 to 31% of gross monthly income, a common lender guideline.
- Compare loans on total interest, not just the monthly payment.
- Look at the schedule: early payments are mostly interest, which is why early overpayments help so much.
Common mistakes
- Forgetting property tax and insurance, which can add hundreds a month.
- Confusing the interest rate with APR. APR includes fees; use the rate here.
- Ignoring closing costs (often 2 to 5% of the price), which you’ll need in cash.
- Stretching to the maximum approved amount without leaving room for repairs and savings.
Related tools
Check other loans with the Loan Calculator, see how savings grow with the Compound Interest Calculator, or plan a deposit with the Savings Goal Calculator.