Mortgage Calculator
Calculate your monthly mortgage payment, total interest, and see a year-by-year amortization schedule.
Purchase price of the home
Amount paid upfront (aim for 20% to avoid PMI)
Annual interest rate
Length of the mortgage
Enter your mortgage details, then click Calculate.
How Mortgage Payments Are Calculated
The Mortgage Payment Formula
Your monthly mortgage payment is calculated using the standard loan amortization formula. It takes three inputs: the loan amount (home price minus your down payment), the annual interest rate, and the loan term in years.
The formula ensures that each monthly payment is the same amount. Early in the loan, most of each payment goes toward interest. Over time, the split shifts so that more goes toward paying down the principal balance.
Understanding Amortization
Amortization is the process of paying off a loan through regular payments over time. Each payment covers two things:
- Interest: calculated on your remaining loan balance each month
- Principal: the portion that reduces your outstanding balance
In year 1 of a 30-year mortgage at 7%, roughly 70% of each payment goes to interest. By year 25, roughly 70% goes to principal. This is why making extra principal payments early in the loan term has such a dramatic effect on total interest paid.
Down Payment Impact
Your down payment directly affects the loan amount and therefore your monthly payment. A larger down payment also typically qualifies you for a lower interest rate and eliminates the need for Private Mortgage Insurance (PMI) if you put down 20% or more.
What This Calculator Shows
This calculator gives you the monthly principal and interest payment, total amount paid over the life of the loan, total interest cost, and a year-by-year amortization table showing how your balance decreases over time.