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Mortgage Calculator

Calculate your monthly mortgage payment and total interest for any home price, down payment, rate, and term.

Monthly P&I Payment
Monthly P&I = L × [r(1+r)^n] / [(1+r)^n − 1] L = loan amount (price − down payment) r = monthly rate (annual rate / 12) n = total months Total interest = (Monthly payment × n) − L

This calculates principal and interest only. Your full monthly cost (PITI) also includes property taxes (~1% of value/year), homeowner's insurance (~0.5%/year), and PMI if your down payment is under 20%.

Monthly P&I (loan A1, rate% B1, months C1)
=PMT(B1/100/12,C1,-A1)
Total interest paid
=PMT(B1/100/12,C1,-A1)*C1-A1
Total paid
=PMT(B1/100/12,C1,-A1)*C1

What Your Mortgage Payment Actually Covers

The monthly payment this calculator produces covers only principal and interest (P&I) — the actual loan repayment. Your real monthly housing cost is higher once you add the other components of PITI: property taxes, homeowner's insurance, and possibly private mortgage insurance (PMI).

Property taxes average around 1-1.2% of home value annually, divided by 12 and added to your monthly payment. On a $400,000 home that's roughly $333-$400/month in taxes. Homeowner's insurance averages 0.5-1% annually — about $167-$333/month on that same home. PMI (required when your down payment is under 20%) typically adds 0.5-1.5% of the loan amount per year.

Lenders collect taxes and insurance monthly and hold them in an escrow account, paying the bills when they are due. This is why your actual payment to the lender is meaningfully higher than the P&I calculation here. Budget for the full PITI when evaluating affordability, not just the loan payment.

15-Year vs 30-Year: The Real Numbers

The difference between a 15-year and 30-year mortgage is one of the most consequential financial decisions in personal finance. On a $320,000 loan at 7%: the 30-year mortgage costs $2,129/month and you pay approximately $446,000 in total interest over 30 years. The 15-year costs $2,876/month — $747 more — but total interest is only about $197,000. The 15-year saves nearly $250,000 in interest.

The case for the 30-year is flexibility. The lower payment protects you if income drops. The $747/month difference, if invested consistently at 7% annual return, grows to roughly $880,000 over 30 years — potentially more than the interest saved. Whether the 15-year wins financially depends on whether you actually invest that difference, your mortgage rate, and your investment returns.

Most financial advisors suggest: if you can comfortably afford the 15-year payment without stretching, it is generally the better choice. If the higher payment would create financial stress, the 30-year with disciplined extra payments is a reasonable middle path.

Frequently Asked Questions

A common guideline: spend no more than 28% of gross monthly income on PITI (the "front-end ratio"). If you gross $8,000/month, target a maximum PITI of $2,240. At 7% interest with 20% down, that supports a home price of roughly $310,000-$330,000. Lenders also look at total debt payments (including car loans, student loans, credit cards) not exceeding 36-43% of gross income.
Private Mortgage Insurance protects the lender (not you) if you default. It is required when your down payment is under 20% and typically costs 0.5-1.5% of the loan annually. You can request PMI removal once your equity reaches 20% through payments and/or appreciation. Lenders are legally required to cancel PMI automatically when your loan balance reaches 78% of the original purchase price.
One point = 1% of the loan amount paid upfront to reduce your interest rate, typically by 0.25%. On a $320,000 loan, one point costs $3,200. If it reduces your rate from 7% to 6.75%, your monthly payment drops by about $53. Breakeven: $3,200 / $53 = 60 months (5 years). If you plan to stay longer than 5 years, buying points saves money. If you might sell or refinance sooner, skip them.
Extra principal payments directly reduce your balance, which reduces future interest accrual and shortens the loan term. On a 30-year $320,000 mortgage at 7%, paying an extra $200/month cuts the loan term by about 5 years and saves roughly $85,000 in interest. Extra payments are most valuable early in the loan when the balance — and therefore interest accrual — is highest.