Mortgage Payment Calculator
Calculate your monthly mortgage payment based on home price, down payment, loan term, and interest rate.
How Mortgage Payments Work
A mortgage payment consists of two main components: principal and interest. The principal is the amount you borrowed, while the interest is the cost of borrowing that money. Together, these make up your P&I payment — the baseline figure every mortgage calculator computes.
Most mortgages use an amortization schedule where early payments are mostly interest. Over time, a larger portion goes toward reducing the principal balance. This front-loading of interest is why extra payments in the early years of a mortgage have an outsized impact on total interest paid.
Beyond principal and interest, your total monthly housing cost often includes property taxes (escrowed monthly), homeowners insurance, and possibly Private Mortgage Insurance (PMI) if your down payment is under 20%. Our calculator shows the P&I component — the part that varies most with loan terms and interest rate.
The Mortgage Payment Formula
Lenders calculate your fixed monthly payment using the standard amortization formula:
M = P × [r(1+r)^n] / [(1+r)^n − 1]
Where M is your monthly payment, P is the loan principal (home price minus down payment), r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (loan term in years × 12). For a $240,000 loan at 6.5% over 30 years, this works out to approximately $1,517 per month.
How Loan Term Affects Your Payment
The most common loan terms are 15 years and 30 years, but many lenders also offer 10, 20, and 25-year options. Choosing a shorter term means a higher monthly payment but dramatically less total interest. On a $300,000 loan at 6.5%, a 30-year term costs roughly $382,000 in total interest, while a 15-year term costs only about $155,000 — a savings of over $225,000, at the cost of roughly $700 more per month.
How Interest Rate Affects Your Payment
Interest rate is the most sensitive variable in mortgage math. A single percentage point difference on a $300,000 loan changes your monthly payment by roughly $180 and your total interest by over $65,000 over 30 years. Even a 0.25% rate improvement — achievable by improving your credit score before applying or shopping multiple lenders — can save tens of thousands of dollars.