Mortgage Calculator

ABOUT THIS TOOL

Enter a loan amount, interest rate, and loan term to see your monthly payment broken down into principal and interest, plus the total interest cost over the life of the loan. The calculator also illustrates how that split shifts over time: early payments are mostly interest, and more of each payment goes toward principal as the balance shrinks. First-time homebuyers use it to compare how a bigger down payment, a shorter term, or a lower rate changes both monthly affordability and lifetime cost. Keep in mind property taxes, homeowners insurance, and PMI aren't included in the principal-and-interest figure, so your actual monthly housing payment will usually be higher.

HOW TO USE

1. Enter the loan amount (home price minus your down payment).
2. Enter the annual interest rate your lender quoted.
3. Choose the loan term, typically 15 or 30 years.
4. Review the monthly principal-and-interest payment and total interest over the loan.
5. Change the down payment or rate to compare affordability scenarios.
6. Run the numbers again with a shorter term to see the interest savings.

COMMON USE CASES

• A first-time buyer comparing 5% vs. 20% down on the same $350,000 house to see if avoiding PMI is worth the extra cash up front.
• A homeowner weighing whether refinancing from a higher rate to a lower one justifies the closing costs.
• A buyer deciding between a 15-year term with a bigger payment and a 30-year term with more monthly breathing room.
• Someone house-hunting who wants to know what price range keeps the payment under a specific monthly budget.
• A real estate agent giving a client a fast payment estimate during a showing.

TIPS & COMMON MISTAKES

• PMI (private mortgage insurance) usually kicks in below 20% down and isn't included in this payment — add it separately if it applies to you.
• A 0.25% difference in rate sounds small but can add up to thousands of dollars over a 30-year term, so it's worth comparing lenders.
• Extra principal payments made early in the loan reduce total interest more than the same extra payment made later, since interest is calculated on the remaining balance.
• A shorter term raises the monthly payment but can cut total interest paid by tens of thousands of dollars.

MORE QUESTIONS

Does this calculator include property taxes and homeowners insurance?

No. It calculates principal and interest (P&I) only. Property taxes, homeowners insurance, PMI, and any HOA dues are separate costs that lenders often bundle into an escrow payment, so your total monthly housing cost will typically be higher than the number shown here.

Why does so little of my early payments go toward the principal?

Mortgage interest is charged on the outstanding balance, which is highest at the start of the loan. As you pay down principal, the interest portion of each fixed payment shrinks and the principal portion grows — this is called amortization.

How much does a small rate difference actually matter?

On a large loan over a long term, even a quarter or half a percentage point changes the total interest paid by a meaningful amount, because that rate applies to the full outstanding balance for years. Comparing several lenders' rate quotes is one of the highest-value things a borrower can do.

Is a 15-year or 30-year mortgage better?

It depends on your budget and goals. A 15-year loan has a higher monthly payment but a much lower total interest cost and builds equity faster. A 30-year loan has a lower payment, which can make it easier to qualify for or leave room for other savings goals, at the cost of more interest over time.

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