Mortgage Monthly Payment Calculator
Estimate your monthly home loan repayments including principal and interest.
Estimated Monthly Payment
How Your Mortgage Payment is Calculated
Understanding your monthly mortgage obligation is the first step toward homeownership. This calculator uses the standard amortization formula to determine how much you will pay each month in Principal and Interest (P&I).
The Mortgage Formula
The mathematical formula used to determine monthly payments is:
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 months).
- n: Number of months in the 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 7% interest rate over 30 years:
- Monthly Interest Rate: 0.07 / 12 = 0.005833
- Number of Payments: 30 * 12 = 360
- Monthly Payment: $2,128.97
Factors That Influence Your Payment
While our calculator focuses on Principal and Interest, keep in mind that your total monthly housing cost may also include:
- Property Taxes: Usually assessed annually by your local government and divided into 12 payments.
- Homeowners Insurance: Required by lenders to protect the asset.
- Private Mortgage Insurance (PMI): Typically required if your down payment is less than 20%.
- HOA Fees: Fees paid to a homeowners association for community maintenance.
Frequently Asked Questions
How can I lower my monthly mortgage payment?
You can lower your payment by making a larger down payment, securing a lower interest rate through a better credit score, or choosing a longer loan term (though a longer term means paying more interest over the life of the loan).
Does a 15-year mortgage save money?
Yes. While the monthly payments are significantly higher, the interest rate is usually lower, and because you pay off the principal faster, you save tens of thousands of dollars in total interest costs.