How is the monthly mortgage payment calculated?

The monthly principal and interest payment uses the standard amortization formula: M = P [ i(1+i)^n ] / [ (1+i)^n - 1 ], where P is the loan amount (home price minus down payment), i is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments (years multiplied by 12). This calculator assumes a fixed-rate loan.

What is PMI and when do I need it?

Private Mortgage Insurance (PMI) is typically required when your down payment is less than 20% of the home price. It protects the lender if you default. PMI usually costs 0.5% to 1.5% of the loan amount per year and is added to your monthly payment. Once you reach 20% equity in the home, you can generally request to have PMI removed. This calculator does not include PMI automatically — you can account for it by adding the estimated monthly cost to the HOA/fees field.

Is a 30-year mortgage better than a 15-year mortgage?

It depends on your financial goals. A 30-year mortgage has a lower monthly payment, giving you more cash flow flexibility, but you pay significantly more interest over the life of the loan. A 15-year mortgage has a higher monthly payment but typically comes with a lower interest rate and you build equity much faster, saving tens of thousands of dollars in interest. Use this calculator to compare both scenarios side by side.

How much down payment do I need to buy a house?

Conventional loans typically require 3% to 20% down. Putting down at least 20% lets you avoid PMI. FHA loans allow as little as 3.5% down with a credit score of 580 or higher. VA loans (for eligible veterans) and USDA loans (for rural properties) may require no down payment at all. A larger down payment reduces your loan balance, lowers your monthly payment, and reduces the total interest you pay over the loan term.

Mortgage Calculator

Name: Mortgage Calculator
Availability: InStock
Author: Nham Vu

Enter your home price, down payment, loan term, and interest rate to instantly see your monthly payment, total interest, and a year-by-year amortization schedule.

Loan Details

Home Price

Down Payment 20.0%

Loan Term

Annual Interest Rate

Optional — Monthly Costs

Annual Property Tax

Annual Home Insurance

Monthly HOA Fees

Monthly Payment Breakdown

Live calculation

Monthly Principal & Interest

$1,896

Loan Amount

$280,000

Total Interest

—

Total Cost

—

Payoff Date

—

Year	Annual Payment	Interest Paid	Principal Paid	Balance

Summary

Enter your home price, down payment, loan term, and interest rate to instantly see your monthly payment, total interest, and a year-by-year amortization schedule.

How it works

Enter the home price in the Home Price field (default is $350,000).
Enter your down payment amount; the percentage of the home price updates automatically.
Select your loan term (10, 15, 20, 25, or 30 years) and enter the annual interest rate.
Optionally add annual property tax, annual home insurance, and monthly HOA fees for a complete total payment.
Review the live result card for your monthly payment, total interest, and payoff date, then expand the amortization table for a year-by-year breakdown.

Use cases

A first-time homebuyer comparing a 30-year loan at 6.5% against a 15-year loan at 6.0% to weigh monthly affordability versus long-term interest savings.
A homeowner considering a cash-out refinance who wants to see how extending from 20 years remaining to a new 30-year term affects their monthly payment and total cost.
A real estate agent quickly showing clients the estimated all-in monthly cost — including taxes, insurance, and HOA — for properties at different price points.

Frequently Asked Questions

Last updated: 2026-06-09 · Reviewed by Nham Vu