Mortgage Calculator
Work out the monthly payment on a mortgage, see how much of it goes to interest over the life of the loan, and follow the balance year by year in the amortization schedule.
Tax and insurance are rough escrow estimates; your lender’s figures will differ.
Formula and calculation
Worked example
A $300,000 loan at 6.5% for 30 years: the monthly principal-and-interest payment is $1,896.20. Over 360 payments that totals $835,633.47, of which $382,633.47 is interest — roughly 127.54% of the borrowed amount.
Why early payments are mostly interest
With a 6.5% mortgage, the first monthly payment is about $1,625 in interest and only about $271 against the balance — interest is charged on the outstanding amount, and early on you owe nearly all of it. By year 15 the split is roughly even, and in the final years almost everything is principal. This is why one extra payment a year can save tens of thousands: it strikes the balance two decades early, when the interest multiplier is still working against you. Check the schedule table to see the year where principal overtakes interest for your loan.
What the results mean
- Monthly payment
- Your monthly principal-and-interest payment — the loan payment itself, before tax and insurance escrow. It stays the same every month on a fixed-rate mortgage.
- Total monthly
- Monthly payment plus the monthly share of property tax and home insurance. Lenders call the combined figure PITI; these extras usually go into an escrow account.
- Total interest
- Total interest paid over the full term if you keep the loan to the end. On a 30-year loan this is often close to the amount you borrowed — shorten the term or pay extra to cut it.
- Total of all payments
- Everything you pay over the term: principal + interest + tax + insurance as entered.
- Payoff date
- The date of your final payment, counted from the first payment month you set.
- Interest as a share of the loan
- Total interest expressed as a percentage of the amount borrowed — 100% means you pay back double. A useful gut check when comparing loans.
- Total tax & insurance
- Property tax plus home insurance paid over the loan term, as entered in the optional fields. Goes into an escrow account with the monthly payment.
Frequently asked questions
How is a monthly mortgage payment calculated?
With the amortization formula payment = P × r ÷ (1 − (1+r)^−n), where P is the loan amount, r the monthly interest rate and n the number of months. A $300,000 loan at 6.5% over 30 years gives $1,896.20 per month before tax and insurance.
How much house can I afford on a given payment?
As a rule of thumb, keep total housing costs (PITI) under 28% of gross monthly income and total debt under 36–43%. On a $2,000 budget for principal and interest, this loan profile supports about $316,000 at current sample rates — but run your own numbers, including tax and insurance.
Should I choose a 15-year or 30-year mortgage?
A 15-year loan pays far less interest in total — often less than half — but the monthly payment is around 37% higher. The 30-year keeps the payment lower and the difference can be invested, and most 30-year loans allow extra principal payments when money is spare.
What are points and closing costs?
Discount points are prepaid interest that lowers your rate (one point is 1% of the loan); closing costs (2–5% typically) are fees to originate the loan. This calculator shows the loan itself — use the APR calculator to fold fees into an effective rate.
Does paying extra really shorten the loan?
Yes, dramatically. Extra payments go straight to principal, and every dollar of principal removed also removes all its future interest. An extra $300 per month on a $300,000 loan at 6.5% shortens a 30-year term by about 9 years and saves roughly $135,000 in interest.