What is a mortgage calculator?
A mortgage calculator estimates the monthly payment on a home loan. You enter the home price, your down payment, the interest rate and the loan term, and it works out the amount you'd borrow, the fixed monthly principal-and-interest payment, and how much interest you'd pay over the full term. It's a quick way to compare terms and rates before talking to a lender.
How this calculator works
The amount financed is loan = home price − down payment. The monthly payment uses the standard amortizing-loan formula:
Payment = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
- P is the loan amount.
- r is the monthly rate: annual rate ÷ 12 ÷ 100.
- n is the number of monthly payments: term in years × 12.
At 0% interest the payment is P ÷ n. Total payment is the monthly payment × n, and total interest is total payment − loan amount. The term can be 1 to 40 years (30 is the default), and the down payment must be less than the home price.
Worked example
A home priced at 400,000, with a 80,000 down payment (20%), at an example rate of 6.5% over 30 years:
- Loan amount: 400,000 − 80,000 = 320,000.
- Monthly rate: 6.5 ÷ 12 ÷ 100 = 0.0054167.
- Growth factor over 360 months: (1.0054167)^360 = 6.991798.
- Payment = 320,000 × 0.0054167 × 6.991798 ÷ 5.991798 = 2,022.62 a month.
- Total payment: 728,142.36, of which 408,142.36 is interest.
In the first month, 1,733.33 of that payment is interest and only 289.28 reduces the balance. Over 30 years you'd pay more in interest than the amount you borrowed.
How the loan term changes the cost
Same 320,000 loan at the 6.5% example rate:
| Term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 10 years | 3,633.54 | 116,024.23 | 436,024.23 |
| 15 years | 2,787.54 | 181,757.84 | 501,757.84 |
| 20 years | 2,385.83 | 252,600.17 | 572,600.17 |
| 25 years | 2,160.66 | 328,198.87 | 648,198.87 |
| 30 years | 2,022.62 | 408,142.36 | 728,142.36 |
Going from 30 to 15 years raises the payment by about 765 a month but saves over 226,000 in interest.
How to use the calculator
- Enter the home price.
- Enter your down payment (0 is allowed).
- Enter the annual interest rate from a lender quote.
- Set the loan term in years.
- Click Calculate to see the loan amount, monthly payment, total interest and total payment.
The calculator doesn't use a currency, so enter amounts in whatever currency you're borrowing in.
What your real monthly payment adds
The figure here is principal and interest only. A lender's monthly bill often includes more:
- Property taxes and homeowners insurance. In the US these are commonly collected through an escrow account, which the CFPB describes as an account your lender sets up to pay certain property-related expenses.
- Mortgage insurance. The CFPB notes that PMI is usually required on a conventional loan when you put down less than 20%, and that it protects the lender, not you.
- HOA or service charges, if the property has them.
- Upfront costs such as closing costs, points and fees, which this calculator ignores. Because of these, the APR on a loan offer is usually higher than its interest rate, as the CFPB explains.
It also assumes a fixed rate for the whole term and no extra payments. If you overpay, the loan amortization calculator helps you see how much balance is left at each stage, which is what an overpayment reduces.
Related calculators
- Loan amortization calculator: remaining balance after year 1, 5, 10 and so on.
- Loan EMI calculator: the same payment for any loan, with the tenure in months.
- Budget calculator: see how the payment fits alongside your other monthly costs.
- Compound interest calculator: compare what a down payment could grow to if invested instead.
Results are estimates for illustration and aren't financial advice; your lender's actual figures may differ.
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