Mortgage Payment Calculator
Calculate your monthly mortgage payment, total interest, and see a full amortization schedule. Enter your loan details below.
How Much Can I Borrow?
Based on your income and the 28/36 rule, estimate how much mortgage you can afford.
Extra Payment Calculator
See how making extra payments can reduce your loan term and save you thousands in interest.
A mortgage is likely the largest loan you will ever take out. Understanding how your monthly payment is calculated helps you make informed decisions about home buying, comparing loan offers, and planning your finances.
For other financial calculations, visit our interest rate calculator or percentage calculator.
How Mortgage Payments Are Calculated
Your monthly mortgage payment is calculated using the loan amount, interest rate, and loan term. The formula ensures you pay off the entire loan plus interest in equal monthly installments.
Each monthly payment consists of two parts:
- Principal: The portion that reduces your loan balance
- Interest: The cost of borrowing the money
In the early years, most of your payment goes toward interest. As you pay down the loan, more goes toward principal. This is called amortization.
What Affects Your Monthly Payment
| Factor | Effect on Payment |
|---|---|
| Loan Amount | Higher loan = higher payment |
| Interest Rate | Higher rate = higher payment |
| Loan Term | Longer term = lower payment (but more total interest) |
| Down Payment | Larger down payment = smaller loan = lower payment |
15-Year vs 30-Year Mortgage
Choosing between a 15-year and 30-year mortgage involves trade-offs:
| Feature | 15-Year Mortgage | 30-Year Mortgage |
|---|---|---|
| Monthly Payment | Higher | Lower |
| Interest Rate | Usually 0.5-1% lower | Usually higher |
| Total Interest Paid | Much less | Much more |
| Equity Building | Faster | Slower |
| Monthly Flexibility | Less | More |
30-year: $1,896/month, total interest = $382,633
15-year: $2,613/month, total interest = $170,377
The 15-year loan costs $717 more per month but saves $212,256 in interest.
The 28/36 Rule for Affordability
Lenders use the 28/36 rule to determine how much you can afford:
- 28% Rule: Your mortgage payment should not exceed 28% of your gross monthly income
- 36% Rule: Your total debt payments (mortgage + other debts) should not exceed 36% of gross income
If you have $400/month in other debts, max mortgage = $2,400 – $400 = $2,000
How to Lower Your Monthly Payment
- Make a larger down payment: Every dollar down reduces your loan amount
- Choose a longer loan term: Stretches payments over more time (costs more in total)
- Shop for a lower interest rate: Even 0.5% makes a big difference
- Buy a less expensive home: The simplest way to reduce payments
- Improve your credit score: Better credit = better rates
How to Pay Off Your Mortgage Faster
- Make extra payments: Even $100/month extra saves thousands
- Make biweekly payments: Results in 13 payments per year instead of 12
- Round up payments: Round to the nearest $100
- Apply windfalls: Put bonuses, tax refunds toward principal
- Refinance to a shorter term: If rates have dropped
On a $300,000 loan at 6.5% for 30 years, paying just $200 extra per month cuts 7 years off the loan and saves over $90,000 in interest.
What is Not Included in Your Mortgage Payment
The payment calculated here is principal and interest only. Your actual monthly housing cost may also include:
- Property taxes: Typically 0.5-2.5% of home value annually
- Homeowner’s insurance: Usually $1,000-$3,000 per year
- Private Mortgage Insurance (PMI): Required if down payment is less than 20%
- HOA fees: If applicable, can be $100-$500+ per month
These additional costs can add 25-40% to your base mortgage payment.
Mortgage Payment Examples
| Loan Amount | Rate | Term | Monthly Payment | Total Interest |
|---|---|---|---|---|
| $200,000 | 6% | 30 years | $1,199 | $231,677 |
| $300,000 | 6.5% | 30 years | $1,896 | $382,633 |
| $400,000 | 7% | 30 years | $2,661 | $558,036 |
| $500,000 | 7% | 30 years | $3,327 | $697,545 |
| $300,000 | 6% | 15 years | $2,532 | $155,683 |
Frequently Asked Questions
Use the 28/36 rule: your mortgage payment should be no more than 28% of gross monthly income, and total debt no more than 36%. With a $6,000 monthly income, aim for a mortgage payment under $1,680.
For the best rates, aim for 740+. Scores of 700-739 get good rates. Below 620 may require FHA loans or higher rates. Each 20-point improvement can save you 0.125-0.25% on your rate.
Paying 1 point (1% of loan) typically lowers your rate by 0.25%. Calculate your break-even point: divide the cost of points by your monthly savings. If you’ll stay longer than that, points make sense.
Compare your mortgage rate to expected investment returns. If your mortgage is 6% and investments average 8-10%, investing may win mathematically. But paying off a mortgage provides guaranteed return and peace of mind.
Private Mortgage Insurance is required when down payment is less than 20%. It typically costs 0.5-1% of the loan annually. Avoid it by putting 20% down, or request removal once you reach 20% equity.
Fixed rates stay the same for the life of the loan – predictable but often higher initially. ARMs start lower but can increase. Choose fixed for long-term stability, ARM if you plan to sell or refinance within 5-7 years.
20% avoids PMI and gets best rates, but many lenders accept 3-5% down. FHA loans allow 3.5%. Weigh the cost of PMI against waiting to save more.
Closing costs typically run 2-5% of the loan amount and include origination fees, appraisal, title insurance, and more. On a $300,000 loan, expect $6,000-$15,000 in closing costs.
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