What Is a Mortgage?
A mortgage is a loan to buy a home, with the home itself as security: if you stop paying, the lender can take it. You repay it in monthly payments of principal and interest, often over 15 or 30 years. The 30-year fixed-rate loan is the most common in the U.S. This calculator is mainly for U.S. buyers.
What you pay besides the loan
- Property tax: paid to local government, based on the home's value.
- Home insurance: protects against damage to the home and liability.
- Private mortgage insurance (PMI): usually required with under 20% down. It protects the lender, not you, and often costs about 0.5% to 1% of the loan a year.
- HOA fees: charged by a homeowners association for shared upkeep.
- Other costs: maintenance, utilities and general upkeep. Many owners spend 1% or more of the home's value a year on maintenance alone.
There are one-time costs too, which this calculator doesn't include: closing costs, any early renovations, and moving, furniture and appliances.
When PMI ends
Under U.S. law, you can generally ask to cancel PMI once your balance is scheduled to reach 80% of the home's original value. Your servicer generally must end it when the balance is scheduled to reach 78%, or the month after the loan's midpoint, if you're current on payments. Some loans follow different rules. The calculator stops counting PMI at 78% or the midpoint, whichever comes first.
Which calculator should I use?
- This calculator: to see the full cost of owning a home with a mortgage.
- Mortgage Payoff calculator: to see what paying extra each month saves.
- Loan Refinance calculator: to compare your current loan with a new one.
- Amortization calculator: when you only want a loan's payments and schedule.
- Home Rent or Buy calculator: to compare buying with renting.
- APR calculator: to see the true cost of a loan that has fees.
How to Calculate a Mortgage Payment
First, the loan is the home price minus your down payment. Then the monthly payment is:
- PMT: the monthly mortgage payment.
- PV: the loan amount.
- i: the monthly interest rate as a decimal (yearly rate ÷ 12).
- n: the number of monthly payments (years × 12).
At 0% interest, the payment is simply the loan amount ÷ n. For the full monthly payment, add one-twelfth of each yearly cost:
Example
A $350,000 home with 20% down, a 30-year loan at 6%, 1.5% property tax and $1,500 of insurance a year:
- Loan = $350,000 − $70,000 = $280,000
- i = 6% ÷ 12 = 0.005, and n = 30 × 12 = 360, so the mortgage payment is $1,678.74
- Property tax = $350,000 × 1.5% ÷ 12 = $437.50, and insurance = $1,500 ÷ 12 = $125.00
- Full monthly payment = $1,678.74 + $437.50 + $125.00 = $2,241.24
- With 10% down instead, PMI of $1,575 a year adds $131.25 a month until payment 103, about $13,518.75 in all.
How to Use the Mortgage Calculator
"If I buy a $350,000 home with 20% down and a 30-year loan at 6%, what will I really pay each month, and how much interest will I pay?" This calculator answers that.
Let's enter the numbers for this example in each box. They are already filled in when the calculator opens, so you can follow along and then change any box to match your own home.
- Home Price: Enter 350,000, which is the price you agreed. It must be greater than 0 and less than $1 billion.
- Down Payment: Enter 20, which is the percent of the price you pay up front.
- Interest Rate: Enter 6, which is the loan's yearly interest rate in percent. It must be from 0 to 99.99.
- Loan Term: Enter 30, which is the length of the loan in years. It must be a whole number from 1 to 50.
- Property Tax: Enter 1.5, which is your yearly property tax as a percent of the home's price.
- Home Insurance: Enter 1,500, which is your insurance cost for a year.
- PMI: Leave it at 0, which is private mortgage insurance for a year. The box is off at 20% or more down. Below that it fills in at 0.5% of the loan, and you can type your own amount.
- HOA Fees: Enter 0, which is your homeowners association fees for a year.
- Other Costs: Enter 0, which is anything else you pay each year for the home, such as maintenance.
- Start Date: Leave it at today's date, which is the day the loan starts. The first payment is due one month later.
Calculate and Reset
Click Calculate to see your results. If a box has a problem, such as a letter in a number box, a message pops up under that box instead. With the default numbers you get:
- Your Results: a short summary in words, including when PMI is expected to end if you have it.
- Full Monthly Payment: the headline number, $2,241.24.
- Mortgage Payment, Loan Amount, Total Interest and Pay-off Date: $1,678.74, $280,000, $324,347.80, and your last payment 30 years after the start date.
- Where your monthly payment goes: one bar split into each cost. Links under it open the Amortization, Mortgage Payoff and Rent or Buy calculators with your numbers filled in.
- Your equity over time: how much of the home you own each year as the balance falls, assuming its value stays at the price.
- All your costs: each cost a month and over the loan: $806,847.80 out of pocket, or $876,847.80 with the down payment.
- Payment schedule: every payment split into interest and principal. Download Excel saves the monthly and yearly schedules and your costs with the formulas, so you can change a number and see them update.
- Share Results: a link that opens this calculator with your numbers filled in. Copy it, or share it on Facebook or X.
Amounts of $1 million or more are shortened, for example $1.25M. Click Reset to put every box back to its default (and the start date back to today) and show the default results again.