Mortgage Calculator

How to use the Mortgage Calculator

1. 1

   Pick your currency, then enter the home price and your down payment as a percentage or an amount.

2. 2

   Enter the yearly interest rate your lender quoted and choose a 10, 15, 20, 25 or 30-year term, or type a custom one. Set the month of your first payment.

3. 3

   Add yearly property tax and insurance, any monthly HOA fee and a PMI rate if you put down under 20%. Leave unused fields at 0.

4. 4

   Read the monthly total and donut chart, and try an extra monthly payment to see the interest and months it saves.

5. 5

   Scroll to the amortization schedule and tap a year to open the month-by-month breakdown.

How the monthly mortgage payment is worked out

Fixed-rate mortgages use the amortization formula: the payment M equals P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the amount you borrow, r is the monthly rate (the yearly rate divided by 12, then by 100) and n is the number of monthly payments. The payment stays level, but its interest and principal split changes every month.

Here is a full example. A home costs $375,000 and you put down 20%, or $75,000, so you borrow $300,000. The rate is 6.5% for 30 years. The monthly rate is 0.065 ÷ 12 = 0.0054167, and n is 360. Raising 1.0054167 to the 360th power gives about 6.9918. Put those into the formula and the principal and interest payment comes to $1,896.20.

In the first month, interest is $300,000 × 0.0054167 = $1,625.00, so only $271.20 of your payment reduces the loan. Across the whole first year you pay $19,401.27 in interest and just $3,353.18 in principal. The balance does not fall below half the original loan until payment 257, more than 21 years in. Over 30 years you pay $682,633.47 in total, of which $382,633.47 is interest.

Now add the costs that usually travel with the payment. Property tax of $4,000 a year adds $333.33 a month and insurance of $1,500 a year adds $125.00. The full monthly figure becomes $2,354.53, which is the number to compare against your budget.

15-year vs 30-year mortgage: what the term really costs

A longer term lowers the monthly payment but stretches interest over many more years. The table keeps the same $300,000 loan at 6.5% and changes only the term.

Moving from 30 to 15 years raises the payment by $717.12 a month but cuts total interest by $212,235.49. In practice the gap is often wider, because lenders usually price shorter terms at a lower rate. Try both terms with the rates you are actually offered.

The 30-year option still has a place: a lower required payment leaves room for an emergency fund or retirement savings, and you can pay extra when money allows.

How extra payments save interest and time

Any money paid on top of the scheduled amount goes straight to principal. Because next month's interest is charged on a smaller balance, the saving compounds over the remaining years. On the $300,000 loan at 6.5% for 30 years, the effect looks like this:

• $100 extra a month saves $60,994.79 in interest and ends the loan 48 months early.
• $200 extra a month saves $103,448.79 and ends the loan 83 months (6 years 11 months) early.
• $500 extra a month saves $179,759.08 and pays the loan off in 210 months instead of 360.

Check your loan terms first. Many US mortgages allow prepayment without penalty, while UK fixed-rate deals commonly cap penalty-free overpayments each year and Canadian lenders set yearly prepayment limits. Ask the lender to apply the money to principal.

Taxes, insurance, HOA and PMI: costs beyond the loan itself

In the US these are often bundled into one payment known as PITI (principal, interest, taxes and insurance), with the tax and insurance share held in an escrow account. Those amounts change when your tax assessment or premium changes, so your payment can move even on a fixed-rate loan.

Private mortgage insurance (PMI) protects the lender, not you, and is usually required on US conventional loans when you put down less than 20%. It is charged as a yearly percentage of the loan. Take a $300,000 home with 10% down: the loan is $270,000, and PMI at 0.5% adds $112.50 a month. With the 80% rule switched on, the calculator stops PMI after 95 payments, when the balance drops to $240,000, for a total of $10,687.50. Under US federal rules you can ask to cancel PMI at 80% of the original value and it should end automatically at 78%. Government-backed loans such as FHA loans follow different rules.

Elsewhere, Australia has lender's mortgage insurance, typically a one-off premium, and Canada requires default insurance when the down payment is under 20%. UK service charges and Australian strata levies work much like US HOA dues, so enter them in the HOA field.

What this estimate does not cover

The calculator assumes one fixed rate for the whole term. Adjustable-rate mortgages, and the two to five-year fixed periods common in the UK, Canada and Australia, will reset to a new rate, so treat the long-term totals as a scenario rather than a forecast. Canadian fixed-rate mortgages are also compounded semi-annually, which makes the real payment slightly lower than a monthly-compounding estimate.

Closing costs, lender fees, stamp duty or transfer taxes and maintenance are not included. Results are planning estimates, not financial advice or a loan offer. Get a written quote, and in the US compare each lender's Loan Estimate form.