Mortgage Calculator: Monthly Home Loan Payment

Guide

How the mortgage payment is calculated

Almost every fixed-rate mortgage in the world uses the same amortization formula: M = P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1), where P is the amount borrowed (price minus down payment), r is the monthly interest rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly payments. Each payment is the same size, but the split changes over time: in the early years most of the payment is interest, while near the end most of it repays principal. That is why the balance falls slowly at first and quickly later.

Worked example

A home costs 300,000 with a 20% down payment of 60,000, so the loan is 240,000. At 6.5% a year for 30 years the monthly principal-and-interest payment is about 1,517. Over 360 payments you pay roughly 546,000 in total, of which about 306,000 is interest. Cutting the term to 15 years raises the payment to about 2,091 but reduces total interest to roughly 136,000, a saving of more than half.

Taxes, insurance and other monthly costs

Lenders in many countries collect property tax and home insurance with the mortgage payment, sometimes called PITI (principal, interest, taxes, insurance). Add the yearly amounts in the optional fields and the calculator divides them by twelve. Remember that private mortgage insurance, homeowner association fees, maintenance and utilities are also real monthly costs even if they are not part of the loan.

Tips to lower your mortgage cost

A larger down payment reduces both the loan and, often, the rate. Comparing at least three lenders can lower the rate by a quarter to half a percent, which on a large loan is worth thousands. Making one extra payment a year, or rounding the payment up, shortens the term noticeably. Fixed rates give certainty; adjustable rates may start lower but can rise. Always read the annual percentage rate (APR), which includes fees, rather than the headline rate alone.

This calculator runs entirely in your browser, nothing you type is sent to a server, and the currency follows your location automatically. Results are estimates for planning; your lender's official quote will include its exact fees and rounding.

Key terms

Principal

The amount you actually borrow, which is the home price minus your down payment. Interest is charged only on the principal that is still outstanding.

Down payment

The cash you pay upfront. Many lenders want 10–20%, and below 20% some countries require mortgage insurance.

Amortization

The schedule that spreads repayment across equal monthly payments, shown year by year in the table above.

Term

The number of years over which the loan is repaid, commonly 15, 20, 25 or 30 years.