Formula: Monthly payment = P × (r(1+r)ⁿ) / ((1+r)ⁿ − 1), where P is the loan amount, r is the monthly rate, and n is the number of months. This is the industry-standard fixed-rate amortization identity used by every major U.S. lender.
Principal and interest split shift sharply over time. On a new 30-year loan, roughly 75–80% of each early payment is interest — you don't cross the 50/50 line until about year 18 at a 6.5% rate.
"Total paid" is principal plus interest only. Your real bill will add property taxes (typically 1–2% of home value per year), homeowners insurance, and PMI if your down payment is under 20%.
Rates move payments more than you think. On a $400,000 loan, a single percentage point of rate is about $250 more per month and roughly $90,000 more over 30 years.
Hitting 20% down eliminates PMI and usually unlocks the best rate tier — try adjusting the down payment input to see the break even moment.
How this calculator works
You enter the home price, down payment (in dollars or percent — they stay in sync), loan term in years, and the annual interest rate. The tool subtracts your down payment to get the financed loan amount, applies the standard amortization formula with monthly compounding, and returns your fixed principal-and-interest payment plus total interest over the life of the loan. It assumes a fully-amortizing fixed-rate loan with no prepayments, no points, and no escrow. Property taxes, homeowners insurance, HOA dues, and PMI are not included — budget those separately.
What affects your real-world payment
Your actual quoted rate. Credit score, debt-to-income, loan-to-value, and property type can move your rate by more than a full percentage point from the headline number you see advertised.
Loan term. A 15-year loan typically carries a lower rate and cuts total interest by more than half, but raises the monthly payment by 30–50%.
Down payment size. Under 20% triggers PMI on conventional loans (usually 0.3–1.5% of the loan annually) and can bump your rate.
Points. Paying discount points trades upfront cash for a lower rate; breakeven is typically 4–7 years.
Escrow additions. Your monthly bill from the servicer will usually be several hundred dollars higher than the principal-and-interest figure above, because taxes and insurance are bundled in.
Worked example
A $450,000 home with 20% down ($90,000) leaves a $360,000 loan. At 6.75% on a 30-year fixed, the monthly principal-and-interest payment is about $2,335. Over 30 years you'll pay roughly $840,500 total, of which about $480,500 is interest. Drop the rate to 5.75% and the payment falls to about $2,101 — a $234/month difference that saves around $84,000 over the life of the loan.
Quick questions
Should I take a 30-year or 15-year mortgage?
A 15-year loan cuts total interest dramatically and usually comes with a rate 0.5–0.75% lower, but the monthly payment is 30–50% higher. Pick 15-year only if the payment fits comfortably and you're still hitting retirement savings targets. Otherwise a 30-year with optional extra principal payments gives you the same payoff path with more flexibility if cash flow gets tight.
How much down payment do I actually need?
Conventional loans allow as little as 3% down; FHA loans go to 3.5%. But anything under 20% triggers mortgage insurance (PMI on conventional, MIP on FHA) that can add $150–$400 per month on a typical loan. 20% is the threshold that eliminates PMI on conventional loans and usually unlocks the best rate tier.
Does this include property tax and insurance?
No — this calculator shows principal and interest only. Expect to add roughly 1–2% of the home's value per year for property taxes and $1,200–$2,500 per year for homeowners insurance, both usually collected monthly through an escrow account managed by your lender.
When does refinancing make sense?
A common rule of thumb is a rate drop of at least 0.75–1.0%, with closing costs you can break even on within 2–3 years. Breakeven depends on how long you'll stay in the home — if you might sell sooner, the math shifts. Run your actual numbers through the refinance calculator before deciding.
Can I actually afford this payment?
Lenders typically cap housing payments at 28% of gross monthly income and total debt payments at 36–43%. If your calculated principal-and-interest, plus estimated taxes and insurance, exceeds 28% of pre-tax income, step through the debt-to-income and house affordability calculators before committing.
Fixed-rate vs adjustable-rate (ARM)?
Fixed-rate locks your payment for the full term — this calculator assumes fixed. ARMs start lower but reset on a schedule (commonly 5, 7, or 10 years in). ARMs only make sense if you're confident you'll sell or refinance before the first reset, or if fixed rates are unusually high and you expect them to fall.
Estimate only. Results reflect your inputs and standard amortization math — they are not financial, tax, legal, or investment advice. Your actual rate, closing costs, and total monthly housing cost will depend on your lender, credit profile, local taxes, and insurance. Verify important decisions with a licensed mortgage professional.