A mortgage is usually the largest financial commitment of your life, so knowing the monthly payment before you shop matters. Enter the home price, your down payment, the interest rate and the loan term above, and the calculator shows your monthly principal-and-interest payment plus the total interest you’ll pay over the life of the loan.
How the monthly payment is calculated
Fixed-rate mortgages use the standard amortization formula:
where P is the loan amount, r the monthly interest rate, and n the number of payments.
Example: a $280,000 loan at 6.5% for 30 years. The monthly rate is 0.065 ÷ 12 = 0.00542, over 360 payments — giving a monthly payment of about $1,770. Over 30 years you’d pay roughly $357,000 in interest alone: more than the loan itself.
Why early payments are mostly interest
Each payment is split between interest and principal, but not evenly. In the early years, the balance is large, so most of your payment covers interest; only later does the split tilt toward principal. That’s why extra payments early in the loan save far more interest than the same extra amount paid near the end.
15-year vs 30-year loans
On that same $280,000 loan at 6.5%:
| Term | Monthly payment | Total interest |
|---|---|---|
| 30 years | ~$1,770 | ~$357,000 |
| 15 years | ~$2,440 | ~$159,000 |
The 15-year costs about $670 more per month but saves roughly $198,000 in interest. Shorter terms also tend to come with lower rates, widening the gap further.
Down payments and PMI
Putting down 20% or more avoids private mortgage insurance (PMI), which typically adds 0.5–1% of the loan amount per year until you reach 20% equity. A bigger down payment also means a smaller loan, a lower monthly bill, and less total interest — but don’t drain your emergency fund to get there.
What this calculator doesn’t include
The result covers principal and interest only. Your real monthly housing cost also includes property taxes, homeowner’s insurance, and PMI if applicable — lenders bundle these into escrow as PITI. Budget with the full number, not just P&I.
Frequently asked questions
How much house can I afford?
A common rule: keep total housing costs under 28% of gross monthly income, and all debts under 36%. Use the calculator in reverse — find the payment that fits, then solve for the price.
Does the interest rate or the price matter more?
Both, but rates punch above their weight: on a 30-year loan, one extra percentage point of rate raises the payment roughly as much as a 10–12% higher price.
Should I pay extra toward principal?
If your rate is high, extra principal payments earn a guaranteed return equal to your rate. With low rates, investing the difference can win — but the guaranteed saving is hard to beat for peace of mind.
What is an amortization schedule?
A month-by-month table showing how each payment splits into interest and principal and how the balance shrinks. Ask your lender for one — it’s the clearest view of where your money goes.
Fixed or adjustable rate?
Fixed rates give payment certainty for the whole term. Adjustable-rate mortgages start lower but can reset higher — they suit buyers who plan to sell or refinance before the adjustment.
Can I deduct mortgage interest on taxes?
In the US, interest on up to $750,000 of mortgage debt is generally deductible if you itemize. Tax rules change, so confirm current limits with a tax professional.
References
Formula: standard fixed-rate amortization, see Mortgage calculator — Wikipedia. Consumer guidance: CFPB Ask CFPB.