Mortgage Calculator
Calculate your monthly mortgage payment, total interest paid, and total cost of your home loan.
See how down payment and interest rate affect your payments.
How Mortgage Payments Are Calculated
A mortgage payment is calculated using the amortization formula, which spreads your loan balance over a fixed number of equal monthly payments. Each payment covers interest first, then reduces principal.
Monthly payment formula:
M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]
Where:
- M = monthly payment
- P = principal (loan amount)
- r = monthly interest rate = annual rate ÷ 12
- n = total number of payments = years × 12
Worked example:
- Home price: $350,000
- Down payment: $70,000 (20%)
- Loan amount (P): $280,000
- Annual rate: 6.75%
- Monthly rate (r): 6.75% ÷ 12 = 0.5625% = 0.005625
- Loan term: 30 years → n = 360 payments
M = 280,000 × [0.005625 × (1.005625)^360] ÷ [(1.005625)^360 − 1] M = 280,000 × [0.005625 × 7.454] ÷ [7.454 − 1] M = 280,000 × 0.04193 ÷ 6.454 M ≈ $1,815/month (principal + interest only)
Total interest paid:
Total paid = M × n = $1,815 × 360 = $653,400 Interest = $653,400 − $280,000 = $373,400
What’s NOT included in this formula:
- Property taxes (~1–2% of home value per year)
- Homeowner’s insurance (~$1,000–$2,000/year)
- PMI if down payment < 20% (~0.5–1.5% of loan/year)
15-year vs. 30-year comparison:
At the same rate, a 15-year mortgage has payments roughly 40% higher — but total interest paid is typically 50–60% less.