Mortgage Payment Calculator
Estimate your monthly home loan payments instantly.
Understanding Your Mortgage Payment
A mortgage payment consists primarily of two parts: the principal (the amount you borrowed) and the interest (the cost of borrowing the money). However, most homeowners also pay for property taxes and homeowners insurance through an escrow account, which can increase the actual monthly cost.
The Amortization Formula
Our calculator uses the standard fixed-rate amortization formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
- M: Total monthly payment
- P: Principal loan amount (Home price minus down payment)
- i: Monthly interest rate (Annual rate divided by 12)
- n: Number of months (Loan term years multiplied by 12)
Example Calculation
If you purchase a home for $400,000 with a 20% down payment ($80,000), your loan amount is $320,000. At a 6.5% interest rate on a 30-year fixed term:
- The monthly principal and interest payment would be approximately $2,022.62.
- Over 30 years, you would pay a total of $408,144 in interest.
- The total cost of the loan would be $728,144.
Expert Tip: Even a 0.5% reduction in your interest rate can save you tens of thousands of dollars over the life of the loan. Always compare multiple lenders before signing.