Mortgage Calculator

A mortgage is the largest financial commitment most households ever make, and its true cost is easy to underestimate. The monthly payment is only the headline: over thirty years, the interest can exceed the amount borrowed. This calculator shows the full picture — the monthly principal-and-interest payment, the total interest over the life of the loan, and how each year’s payment splits between interest and principal.

Enter a home price, down payment, rate, and term, and the numbers update as you type. The default rate is an editable example drawn from current market data — replace it with your actual quote.

What it measures

The calculator prices a standard fixed-rate mortgage. From the home price and down payment it derives the loan amount, then applies the amortization formula to compute the fixed monthly payment of principal and interest. From that payment it derives the total interest paid over the full term, the all-in cost (payments plus down payment), the payoff year, and a year-by-year schedule showing interest paid, principal paid, and remaining balance.

How it works

Each monthly payment is fixed, but its composition is not. In month one, most of the payment covers interest on the full balance; a small remainder reduces the principal. The next month, interest is calculated on the slightly smaller balance, so a slightly larger slice goes to principal. This is amortization: the interest portion shrinks and the principal portion grows on a fixed schedule until the balance reaches zero in the final month.

The payment formula is M = P × r / (1 − (1 + r)^−n), where P is the loan amount, r the monthly rate, and n the number of payments. The yearly table is built by simulating every monthly payment in sequence.

Each input, explained

Home price. The purchase price of the property. This is the starting point for everything else.

Down payment. Entered as a percentage; the calculator shows the dollar amount underneath. Twenty percent is the conventional benchmark — it typically avoids private mortgage insurance (PMI) — but many buyers put down less. Whatever you do not pay up front becomes the loan amount.

Interest rate. The annual rate on the loan. The default of 7.00% is an example — edit it to your actual quote. Freddie Mac’s weekly average for a 30-year fixed was 6.95% on Sept 17, 2026; Bankrate’s daily average was 7.17% on Sept 24, 2026. Small differences in this field move the total cost by tens of thousands of dollars, which is why the rate you lock matters. For context on what moves rates, see How Central Bank Rate Decisions Ripple Through Markets and Bond Yields Explained: Why Rising Yields Rattle Stocks.

Loan term. Fifteen, twenty, or thirty years. Shorter terms carry higher monthly payments but dramatically lower total interest; longer terms do the reverse.

Worked example

Take the defaults: a $450,000 home, 20% down ($90,000), a 7.00% rate, and a 30-year term. The loan amount is $360,000.

The monthly principal-and-interest payment is $2,395.09. Over 360 payments that totals about $862,232 — meaning total interest is roughly $502,232, about 1.4 times the amount borrowed. Add the $90,000 down payment and the all-in cost is roughly $952,232 for a $450,000 house. Starting in 2026, the loan pays off in 2056.

The first year shows why early payments feel unproductive: of the $28,741 paid in year one, about $25,084 goes to interest and only $3,657 reduces the balance, leaving $356,343 still owed. By the final year the split is nearly all principal. Switch the term to 15 years and the payment rises to about $3,236 a month — but total interest falls to roughly $222,000, a saving of some $280,000 in interest for the higher monthly outlay.

Limitations

The monthly figure covers principal and interest only. It excludes property taxes, homeowners insurance, PMI, and HOA dues — in practice most borrowers pay these through escrow, so the actual monthly outlay is higher. The calculator assumes a fixed rate for the full term; adjustable-rate mortgages are not modeled. It ignores closing costs, points, prepayment, and refinancing. It is not a loan offer, a quote, or a qualification decision.

Frequently asked questions

Why is my first payment almost entirely interest?
Interest is charged on the outstanding balance, which is at its largest on day one. With a $360,000 loan at 7%, the first month’s interest alone is $2,100 of the $2,395 payment. As the balance falls, the interest charge falls with it and more of each fixed payment reaches the principal.

What is the difference between interest rate and APR?
The interest rate prices the loan itself. The APR (annual percentage rate) folds in lender fees and points, expressed as a yearly rate, so it is usually slightly higher. When comparing offers, the APR is the more complete number — this calculator uses the plain rate, so it will slightly understate a quoted APR’s cost.

Should I choose a 15-year or a 30-year term?
It is a trade between monthly cash flow and total cost. The 15-year term in the example above costs about $280,000 less in interest but demands roughly $840 more each month. The right answer depends on income stability, other debts, and what the freed cash would otherwise earn — the compound interest calculator can frame that side of the comparison.

How can I pay less interest overall?
Three levers: a lower rate, a shorter term, or extra principal payments, which shorten the schedule because every extra dollar skips future interest. Even one additional payment a year meaningfully cuts the total — try a shorter term in the calculator to see the scale of the effect.

Does a bigger down payment always help?
It reduces the loan amount, the monthly payment, and the total interest, and 20% down typically avoids PMI. The trade-off is liquidity: cash tied up in the house is not available for emergencies or other investments.

What does the payoff year assume?
That you make every scheduled payment on time, with no extra payments, no refinancing, and no rate change — the baseline schedule of a fixed-rate loan taken out this year.

For education only — not financial or tax advice. This calculator does not constitute a loan offer or estimate of creditworthiness. Property taxes, insurance, and other ownership costs are excluded. Consider speaking with a qualified mortgage professional before borrowing.