Home Loan Calculator
Enter your home price, down payment, interest rate, and loan term to see your monthly principal and interest payment instantly. Add property tax, home insurance, PMI, and HOA fees for a complete PITI estimate. The amortization schedule and balance chart update live so you can see exactly how every dollar is applied over the life of the loan.
How the monthly payment is calculated
A fixed-rate mortgage payment is calculated using the standard amortization formula: M = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the principal (loan amount), r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments. This payment covers both interest and a portion of principal each month. Early payments are mostly interest; later payments are mostly principal. The principal and interest (P&I) portion stays the same every month on a fixed-rate loan. Add property taxes, homeowner's insurance, and (if applicable) PMI and HOA fees to get the full monthly cost, sometimes called PITI.
Down payment and PMI
The down payment is the portion of the purchase price you pay upfront. A larger down payment reduces your loan amount, which lowers both the monthly payment and the total interest paid over time. On conventional loans, a down payment below 20% typically triggers Private Mortgage Insurance (PMI), which protects the lender if you default. PMI commonly costs 0.2% to 2% of the loan amount per year. Once your loan-to-value ratio reaches 80% (meaning you own 20% equity), you can usually request PMI removal. FHA loans have their own mortgage insurance premiums that work differently.
How extra payments save money
Any amount you pay above the required P&I goes directly toward reducing the principal balance. Because interest each month is calculated on the remaining balance, a lower balance means less interest accrues the next month. This compounding benefit means even a modest extra payment each month can cut years off a 30-year mortgage and save tens of thousands of dollars. For example, adding $200 per month to a $300,000 loan at 6.8% shortens a 30-year mortgage by over four years and saves roughly $50,000 in interest.
Fixed vs. adjustable-rate mortgages
This calculator models a fixed-rate mortgage, where the interest rate and P&I payment stay constant for the entire term. Adjustable-rate mortgages (ARMs) start with a fixed rate for an initial period (commonly 5, 7, or 10 years) and then adjust periodically based on a market index. ARMs can offer lower initial rates but carry the risk of higher payments if rates rise. Fixed-rate loans give payment certainty and are generally preferred when rates are expected to rise or when the buyer plans to stay in the home long term.
Understanding the amortization schedule
An amortization schedule shows exactly how each payment is split between interest and principal over the life of the loan. In the early years of a 30-year mortgage at typical rates, more than half of each payment is interest. By the final years, nearly all of the payment reduces principal. The schedule also shows the remaining balance after each payment, making it easy to plan a payoff date or understand how much equity you have at any point.
Monthly payment by rate and term (per $100,000 borrowed)
| Interest rate | 30-year | 20-year | 15-year | 10-year |
|---|---|---|---|---|
| 3.0% | $422 | $555 | $691 | $966 |
| 4.0% | $477 | $606 | $740 | $1,012 |
| 5.0% | $537 | $660 | $791 | $1,061 |
| 6.0% | $600 | $716 | $844 | $1,110 |
| 6.5% | $632 | $746 | $871 | $1,136 |
| 7.0% | $665 | $775 | $899 | $1,161 |
| 7.5% | $699 | $806 | $927 | $1,187 |
| 8.0% | $734 | $836 | $956 | $1,213 |
Use this quick-reference table to estimate your P&I payment. Multiply the figure by your loan amount in units of $100,000.
Frequently asked questions
What is included in a monthly mortgage payment?
A full monthly mortgage payment often includes four components, referred to as PITI: Principal (the portion that reduces the loan balance), Interest (the cost of borrowing), Taxes (your share of annual property taxes, collected monthly and held in escrow), and Insurance (homeowner's insurance, also escrowed, plus PMI if required). This calculator separates the P&I portion from the additional costs so you can see each component clearly.
What is a good debt-to-income ratio for a home loan?
Most conventional lenders look for a front-end ratio (housing costs vs. gross income) of 28% or below, and a back-end ratio (all debts vs. gross income) of 36% to 43%. FHA loans allow slightly higher ratios. If your estimated PITI exceeds 28% of your gross monthly income, lenders may require a larger down payment, a lower loan amount, or additional reserves.
How much does PMI cost and when can I remove it?
PMI typically costs 0.2% to 2% of the loan amount per year, depending on your down payment size, credit score, and loan type. On a $320,000 loan at 0.5%, that is $133 per month. Under the Homeowners Protection Act, you can request cancellation once your loan balance reaches 80% of the original appraised value, and lenders must cancel automatically at 78%. Some lenders require a formal appraisal to confirm the current value before removing PMI.
Is a 15-year or 30-year mortgage better?
A 15-year mortgage carries a lower interest rate and you pay far less total interest, but the monthly payment is roughly 40% to 50% higher than a 30-year loan for the same amount. The 30-year loan offers a lower required payment, leaving more monthly cash flow for other goals such as retirement savings or an emergency fund. Many financial planners suggest choosing the 30-year and making extra payments voluntarily, which gives you flexibility without being locked into a higher required payment.
How do I lower my monthly mortgage payment?
The main levers are: a larger down payment (reduces the loan amount), a lower interest rate (shop multiple lenders and improve your credit score), a longer loan term (spreads payments further but increases total interest), and eliminating PMI by reaching 20% equity. Refinancing into a lower rate after closing can also reduce the payment if rates fall.
What interest rate should I use in this calculator?
Use the rate quoted by a lender for your specific loan type and term, not the APR. The APR (Annual Percentage Rate) folds in fees and closing costs to give a broader cost comparison, but the actual amortization formula uses the note rate (the interest rate stated in the loan agreement). If you are shopping, compare at least three quotes; a 0.5% rate difference on a $400,000, 30-year loan changes the monthly payment by about $120 and total interest by over $40,000.