Mortgage Calculator
A mortgage payment is rarely just principal and interest. Property taxes, homeowners insurance, private mortgage insurance and HOA dues can add hundreds of dollars a month, and they are the part that surprises first-time buyers most. This calculator adds them all up and shows where every dollar goes over the life of the loan.
Home and loan details
$80,000 down (20.0%) · $320,000 financed
Shop at least three lenders. A half point is worth tens of thousands over 30 years.
National average is roughly 1.0% to 1.5% of home value, but it varies widely by county.
Where your payment goes
Over the full 30 years term you pay $408,142 in interest on a $320,000 loan, that is 128% of the amount borrowed.
Amortization schedule
The first 12 payments, or the full 360-payment schedule. Early payments are almost entirely interest.
| Payment # | Payment | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | $2,022.62 | $1,733.33 | $289.28 | $319,711 |
| 2 | $2,022.62 | $1,731.77 | $290.85 | $319,420 |
| 3 | $2,022.62 | $1,730.19 | $292.43 | $319,127 |
| 4 | $2,022.62 | $1,728.61 | $294.01 | $318,833 |
| 5 | $2,022.62 | $1,727.01 | $295.60 | $318,538 |
| 6 | $2,022.62 | $1,725.41 | $297.20 | $318,241 |
| 7 | $2,022.62 | $1,723.80 | $298.81 | $317,942 |
| 8 | $2,022.62 | $1,722.18 | $300.43 | $317,641 |
| 9 | $2,022.62 | $1,720.56 | $302.06 | $317,339 |
| 10 | $2,022.62 | $1,718.92 | $303.70 | $317,036 |
| 11 | $2,022.62 | $1,717.28 | $305.34 | $316,730 |
| 12 | $2,022.62 | $1,715.62 | $307.00 | $316,423 |
Assumes a fixed rate for the full term, a constant property tax assessment, and no extra principal payments. Escrow amounts are recalculated by your servicer each year and will change.
How your monthly payment is built
Lenders quote the payment in pieces, and the sum is often called PITI: principal, interest, taxes and insurance.
- Principal: the portion that actually reduces what you owe.
- Interest: the lender's fee, charged on the remaining balance each month.
- Property tax: collected monthly, held in escrow, then paid to your county.
- Homeowners insurance: also escrowed, and required by virtually every lender.
- PMI: private mortgage insurance, normally required when you put down less than 20 percent.
- HOA dues: mandatory in many condos and planned communities.
The formula
The principal-and-interest portion uses the standard amortization formula: M = P x [ r(1 + r)^n ] / [ (1 + r)^n - 1 ], where P is the loan amount, r is the monthly interest rate (annual rate divided by 12) and n is the number of payments.
Early payments are almost entirely interest. On a 30-year loan at 6.5 percent, roughly 80 percent of your first payment goes to interest and only 20 percent reduces the balance. That ratio flips gradually, which is why extra principal paid early is so effective.
Why the down payment matters so much
Below 20 percent down, you generally pay PMI until you have built enough equity. PMI typically costs between 0.3 and 1.5 percent of the loan amount each year, which on a $400,000 loan is $100 to $500 a month that buys you nothing.
A larger down payment also lowers the loan amount, which compounds: less principal means less interest, a smaller payment, and PMI that disappears sooner.
What this calculator leaves out
Closing costs usually run 2 to 5 percent of the purchase price and are paid separately at closing. This tool also assumes a fixed rate for the whole term and a constant property tax bill, so treat the output as a planning estimate rather than a quote.
Frequently asked questions
What is PMI and when does it go away?
Private mortgage insurance protects the lender if you default. It is usually required when your down payment is under 20 percent. Under the Homeowners Protection Act, lenders must cancel it automatically once the loan balance reaches 78 percent of the original home value, and you can request cancellation at 80 percent.
Is a 15-year mortgage better than a 30-year?
A 15-year loan carries a lower rate and roughly a third of the total interest, but the payment is around 45 percent higher. It is the better deal mathematically if the payment fits comfortably in your budget and you have a fully funded emergency fund.
How much house can I afford?
A common guideline is keeping total housing costs at or below 28 percent of gross monthly income, and total debt payments at or below 36 percent. Lenders will often approve more. Many borrowers regret taking the maximum they qualify for.
Does the calculator include closing costs?
No. Closing costs are paid at the closing table rather than rolled into the monthly payment, and typically total 2 to 5 percent of the purchase price. Some buyers finance them by taking a slightly higher interest rate in exchange for lender credits.
Should I pay extra principal or invest the difference?
Paying extra principal earns you a guaranteed return equal to your mortgage rate, tax-free. Investing has historically returned more over long periods but with real risk. Splitting the difference, meaning extra principal plus steady investing, is a common middle path.
This calculator is an educational tool and does not constitute financial, tax or legal advice. Results are estimates based on the inputs and assumptions described above. Verify important figures with a qualified professional or the relevant government agency before acting on them.