Mortgage Monthly Repayment Calculator
Estimate your monthly house payments including principal and interest.
Estimated Monthly Payment
$0.00
Understanding Your Mortgage Repayments
A mortgage is likely the most significant financial commitment you will ever make. Understanding exactly how much you will pay each month—and how much of that goes toward interest versus principal—is crucial for effective budgeting and long-term financial planning.
How This Mortgage Calculator Works
Our calculator uses the standard amortization formula to determine your fixed monthly payment. It takes the total loan amount (the purchase price minus your down payment), the interest rate, and the length of the loan to calculate a flat monthly fee that covers both the interest charged by the bank and a portion of the original debt.
Realistic Example:
If you purchase a home for $500,000 with a 20% down payment ($100,000), you are borrowing $400,000. At a 7% interest rate over 30 years, your monthly principal and interest payment would be approximately $2,661.21.
If you purchase a home for $500,000 with a 20% down payment ($100,000), you are borrowing $400,000. At a 7% interest rate over 30 years, your monthly principal and interest payment would be approximately $2,661.21.
Key Components of a Mortgage Payment
- Principal: The actual amount of money you borrowed. Each month, a portion of your payment goes toward reducing this balance.
- Interest: The cost of borrowing the money, paid to the lender. In the early years of a mortgage, a higher percentage of your payment goes toward interest.
- Loan Term: The duration of the loan. While 30-year terms offer lower monthly payments, 15-year terms significantly reduce the total interest paid over the life of the loan.
- Down Payment: The cash you pay upfront. A higher down payment reduces your loan-to-value ratio, which can often secure a lower interest rate and eliminate the need for Private Mortgage Insurance (PMI).
Tips to Lower Your Monthly Payment
If the calculated monthly payment is higher than your budget allows, consider these strategies:
- Increase your down payment: Every dollar added to your down payment reduces the principal and the interest accrued.
- Improve your credit score: Lenders reserve their best interest rates for borrowers with high credit scores. Even a 0.5% difference in rate can save tens of thousands of dollars.
- Look for a lower home price: Sometimes a slightly smaller home or a different neighborhood can bring the payment into a comfortable range.