Principal and interest
The fixed-rate payment uses the loan amount, annual interest rate, and number of monthly payments. The result stays level while the principal and interest shares change.
Home buying
Mortgage calculator
See the loan payment and the costs around it. Adjust the numbers to estimate principal, interest, taxes, insurance, HOA fees, and PMI.
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Loan details
Build your estimate
Taxes, insurance, and fees
Add the costs that sit beside the loan payment for a more useful monthly estimate.
Loan over time
Yearly amortization
Early payments lean toward interest. As the balance falls, more of the same principal-and-interest payment goes toward the loan itself.
| Year | Starting balance | Principal paid | Interest paid | Ending balance |
|---|---|---|---|---|
| 1 | $320,000.00 | $3,443.14 | $21,335.54 | $316,556.86 |
| 2 | $316,556.86 | $3,681.05 | $21,097.63 | $312,875.81 |
| 3 | $312,875.81 | $3,935.40 | $20,843.28 | $308,940.41 |
| 4 | $308,940.41 | $4,207.31 | $20,571.37 | $304,733.10 |
| 5 | $304,733.10 | $4,498.01 | $20,280.67 | $300,235.09 |
| 6 | $300,235.09 | $4,808.84 | $19,969.84 | $295,426.25 |
| 7 | $295,426.25 | $5,141.09 | $19,637.59 | $290,285.16 |
| 8 | $290,285.16 | $5,496.30 | $19,282.38 | $284,788.86 |
| 9 | $284,788.86 | $5,876.11 | $18,902.57 | $278,912.75 |
| 10 | $278,912.75 | $6,282.11 | $18,496.57 | $272,630.64 |
| 11 | $272,630.64 | $6,716.17 | $18,062.51 | $265,914.47 |
| 12 | $265,914.47 | $7,180.25 | $17,598.43 | $258,734.22 |
| 13 | $258,734.22 | $7,676.37 | $17,102.31 | $251,057.85 |
| 14 | $251,057.85 | $8,206.80 | $16,571.88 | $242,851.05 |
| 15 | $242,851.05 | $8,773.84 | $16,004.84 | $234,077.21 |
| 16 | $234,077.21 | $9,380.09 | $15,398.59 | $224,697.12 |
| 17 | $224,697.12 | $10,028.22 | $14,750.46 | $214,668.90 |
| 18 | $214,668.90 | $10,721.11 | $14,057.57 | $203,947.79 |
| 19 | $203,947.79 | $11,461.90 | $13,316.78 | $192,485.89 |
| 20 | $192,485.89 | $12,253.89 | $12,524.79 | $180,232.00 |
| 21 | $180,232.00 | $13,100.60 | $11,678.08 | $167,131.40 |
| 22 | $167,131.40 | $14,005.79 | $10,772.89 | $153,125.61 |
| 23 | $153,125.61 | $14,973.54 | $9,805.14 | $138,152.07 |
| 24 | $138,152.07 | $16,008.14 | $8,770.54 | $122,143.93 |
| 25 | $122,143.93 | $17,114.24 | $7,664.44 | $105,029.69 |
| 26 | $105,029.69 | $18,296.78 | $6,481.90 | $86,732.91 |
| 27 | $86,732.91 | $19,561.01 | $5,217.67 | $67,171.90 |
| 28 | $67,171.90 | $20,912.60 | $3,866.08 | $46,259.30 |
| 29 | $46,259.30 | $22,357.60 | $2,421.08 | $23,901.70 |
| 30 | $23,901.70 | $23,901.70 | $876.27 | $0.00 |
Know the number
How a mortgage works
A mortgage is a loan secured by the home itself. You borrow the purchase price minus your down payment and repay it in level monthly installments over a set term, most often 15 or 30 years. Because the house is collateral, mortgage rates run far below unsecured credit.
An amortization schedule splits every payment between interest and principal. Interest is charged on whatever balance remains, so early payments are mostly interest and later ones are mostly principal, even though the payment itself never moves on a fixed-rate loan. Lenders usually quote the full monthly cost as PITI: principal, interest, taxes, and insurance.
Taxes and insurance
Yearly property taxes and homeowners insurance are divided by 12. Actual bills can change over time and are often collected monthly through an escrow account.
HOA fees and PMI
Monthly HOA dues and private mortgage insurance are added to the estimate but do not reduce the loan. PMI rules vary, so use a lender quote when you have one.
Mortgage terms worth knowing
- Amortization
- The schedule that splits each payment between interest and principal. Early payments are mostly interest; later ones are mostly principal.
- Escrow
- An account your servicer uses to collect property taxes and homeowners insurance monthly, then pay those bills for you when they come due.
- Loan-to-value (LTV)
- The loan balance divided by the home value. Under 80% LTV is the usual threshold for dropping private mortgage insurance.
- APR
- The interest rate plus lender fees and points, expressed as a yearly rate. It is the fairer number for comparing two loan offers.
- Discount points
- Prepaid interest that buys down the rate. One point costs 1% of the loan and typically pays off only if you keep the loan for years.
- Debt-to-income (DTI)
- Total monthly debt payments divided by gross monthly income. Most conventional lenders look for 43% or lower.
Loan shapes
Loan terms and mortgage types
The term and rate structure move the monthly payment more than almost anything else you control. Change the loan term or interest rate above to see the trade-off in dollars.
30-year fixed
The default in the United States. The lowest required payment and the most flexibility month to month, at the cost of the most total interest. The rate never changes.
15-year fixed
A noticeably higher payment, usually a lower rate, and less than half the lifetime interest. It builds equity fast but leaves less slack in the budget.
Adjustable-rate (ARM)
A fixed teaser rate for the first 5, 7, or 10 years, then periodic adjustments tied to an index. Cheaper up front, but the payment can rise at every reset.
FHA, VA, USDA, and jumbo
Government-backed loans allow smaller down payments with their own insurance rules. Jumbo loans exceed conforming limits and typically ask for stronger credit and reserves.
The rest of the cost
Beyond the monthly payment
Two things the payment alone will not tell you: what buying costs on day one, and how much you can save by getting out of the loan early.
Upfront and ongoing costs
- Closing costs commonly run 2% to 5% of the loan for origination, appraisal, title, and prepaid escrow.
- Maintenance is often budgeted near 1% of the home value per year, and it never shows up on a loan estimate.
- Utilities and moving tend to step up with square footage, especially coming from an apartment.
- Tax and insurance drift raises escrow over time even when your principal and interest is fixed.
Paying the mortgage off early
- Extra principal shortens the schedule. Anything above the required payment skips future interest on that balance.
- Biweekly payments add up to one extra monthly payment a year and can cut years off a 30-year loan.
- Recasting re-amortizes the loan after a lump sum, lowering the payment without a full refinance.
- The trade-off is liquidity and opportunity cost. Money in the house is hard to reach, and a low fixed rate can be worth keeping.
Common questions
Mortgage calculator FAQ
How is a monthly mortgage payment calculated?
A fixed-rate payment comes from the amortization formula, which spreads the loan amount over the full term at a constant monthly rate. Take the home price minus the down payment to get the loan amount, divide the annual interest rate by 12 to get the monthly rate, and multiply the loan term in years by 12 to get the number of payments. Property taxes, homeowners insurance, HOA fees, and PMI are added on top of that principal-and-interest figure.
What does PITI mean?
PITI stands for principal, interest, taxes, and insurance - the four pieces most lenders count when they qualify you. Principal and interest repay the loan itself, while property taxes and homeowners insurance are usually collected monthly into an escrow account and paid out by the servicer when the bills come due. HOA dues and PMI sit outside PITI but still leave your checking account every month.
How much house can I afford?
A common lender guideline is the 28/36 rule: keep the total housing payment near 28% of gross monthly income, and all debt payments including the mortgage under 36%. Lenders also look at your credit score, down payment, and debt-to-income ratio. The rule is a starting point, not a limit worth maxing out, because the payment competes with retirement saving, maintenance, and everything else in the budget.
How much should I put down on a house?
Twenty percent down is the level that avoids private mortgage insurance on a conventional loan and lowers both the loan amount and the monthly payment. Many conventional loans allow 3% to 5% down, FHA loans go as low as 3.5%, and VA and USDA loans can require nothing down for borrowers who qualify. A smaller down payment gets you in sooner but means more interest over the life of the loan.
When does PMI go away?
On a conventional loan you can request that PMI be canceled once the balance reaches 80% of the original home value, and the servicer must drop it automatically at 78% if payments are current. Extra principal payments or a new appraisal after the home appreciates can get you there sooner. FHA loans work differently: mortgage insurance premiums often last the life of the loan unless you refinance into a conventional mortgage.
Is a 15-year or 30-year mortgage better?
A 15-year mortgage carries a higher monthly payment but a lower rate and dramatically less total interest, because the balance disappears in half the time. A 30-year mortgage keeps the required payment low, which protects cash flow and leaves room to invest or absorb a bad month. Many buyers take the 30-year term and pay extra toward principal when they can, which captures part of the savings without locking in the higher payment.
How much does a 1% higher interest rate cost?
A lot. On a $320,000 loan over 30 years, moving from 6.7% to 7.7% raises principal and interest by roughly $215 a month and about $78,000 over the full term. That is why shopping several lenders, improving your credit score, or buying discount points can matter more than shaving a little off the home price.
Does this mortgage calculator include property taxes and insurance?
Yes. Enter your yearly property tax and homeowners insurance amounts and the calculator divides each by 12 and folds them into the monthly estimate, alongside monthly HOA dues and PMI. The result is a full housing payment rather than principal and interest alone, which is usually the number that surprises first-time buyers.
The fixed-rate formula
M = P × r(1 + r)n ÷ ((1 + r)n - 1)
M is the monthly principal-and-interest payment, P is the amount borrowed, r is the monthly interest rate, and n is the number of monthly payments.
- Fixed interest rate
- Monthly payments
- Final balance rounds to $0
This calculator provides an estimate for planning, not a loan offer or financial advice. Actual payments can include closing costs, prepaid items, changing taxes or insurance, and lender-specific fees not entered here.
Keep the plan moving
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