Mortgage Calculator
Calculate monthly mortgage payments with taxes, insurance, and PMI. Enter loan amount, interest rate, and term. Free with amortization schedule.
Reviewed by Sahil, Senior Finance & Tax Editor · Editorial policy
Mortgage Calculator Formula
M = P[r(1+r)^n] / [(1+r)^n - 1]
Where M = Monthly payment (principal & interest), P = Loan principal (home price minus down payment), r = Monthly interest rate (annual rate / 12), n = Total number of payments (years x 12). Total monthly payment also includes property tax, homeowner's insurance, and PMI if applicable.
Mortgage Calculator — Worked Examples
Example 1: Standard 30-Year Mortgage
Problem:You're buying a $350,000 home with 20% down ($70,000), 30-year fixed at 6.5%, property taxes of $3,500/year, and insurance of $1,200/year.
Solution:Loan amount = $350,000 - $70,000 = $280,000\nMonthly rate = 6.5% / 12 = 0.5417%\nMonthly P&I = $280,000 x [0.005417 x (1.005417)^360] / [(1.005417)^360 - 1] = $1,769.84\nMonthly tax = $3,500 / 12 = $291.67\nMonthly insurance = $1,200 / 12 = $100.00\nPMI = $0 (20% down)\nTotal monthly = $2,161.51
Result:Monthly Payment: $2,162 | Total Interest: $357,143 | Total Cost: $777,943
Example 2: Low Down Payment with PMI
Problem:You're buying a $300,000 home with 5% down ($15,000), 30-year fixed at 7%, property taxes of $3,000/year, and insurance of $1,100/year.
Solution:Loan amount = $300,000 - $15,000 = $285,000\nMonthly P&I = $285,000 x [0.005833 x (1.005833)^360] / [(1.005833)^360 - 1] = $1,896.07\nMonthly tax = $3,000 / 12 = $250\nMonthly insurance = $1,100 / 12 = $91.67\nPMI = $285,000 x 0.5% / 12 = $118.75\nTotal monthly = $2,356.49
Result:Monthly Payment: $2,356 | Total Interest: $397,585 | PMI adds $119/month
Mortgage Calculator — Frequently Asked Questions
How is a monthly mortgage payment calculated?
A monthly mortgage payment is calculated using an amortization formula that considers the loan principal, interest rate, and loan term. The formula is M = P[r(1+r)^n]/[(1+r)^n-1], where M is the monthly payment, P is the loan principal, r is the monthly interest rate, and n is the total number of payments. Your total monthly housing payment also includes property taxes divided by 12, homeowner's insurance divided by 12, and possibly private mortgage insurance (PMI) if your down payment is less than 20%. In the early years of your mortgage, most of your payment goes toward interest. As time passes, more of each payment goes toward the principal balance. This is called amortization.
Should I choose a 15-year or 30-year mortgage?
A 15-year mortgage has higher monthly payments but saves significantly on total interest. A 30-year mortgage has lower monthly payments but costs more over the life of the loan. On a $300,000 loan at 6.5%, the 15-year option saves a large amount of interest but requires a much higher monthly payment. Choose the 30-year if you need payment flexibility. Choose the 15-year if you can comfortably afford the higher payment and want to build equity faster.
How does the down payment affect my mortgage?
The down payment directly affects your loan amount, monthly payment, interest paid, and whether you need PMI. A larger down payment means borrowing less, paying less interest, and having lower monthly payments. With a $350,000 home at 6.5% for 30 years: 5% down ($17,500) gives a monthly P&I of $2,101 plus PMI. 10% down ($35,000) gives $1,990/month plus PMI. 20% down ($70,000) gives $1,769/month with no PMI. The 20% down payment option saves roughly $332/month compared to 5% down. Over 30 years, the difference in total interest paid is over $100,000. However, tying up too much cash in a down payment can leave you without an emergency fund, so balance is important.
What credit score do I need for the best mortgage rates?
A FICO score of 760 or higher typically qualifies you for the lowest advertised mortgage rates. Dropping from 760 to 700 can cost you 0.25-0.50% more in interest — on a $400,000 30-year loan, that difference costs roughly $60-$120 more per month and over $25,000 in extra interest. Scores between 620-699 still qualify for conventional loans but at noticeably higher rates. Scores below 580 generally require FHA loans, which accept down payments as low as 3.5% but mandate mortgage insurance for the life of the loan. Before applying, pay down revolving balances to below 30% of credit limits — this alone can boost your score 20-40 points.