How to use this mortgage calculator
The calculator above estimates what you would actually pay each month, not just the loan portion. Enter five things and the number updates as you type.
- Home price. The purchase price you are considering. If you are refinancing, use your home’s current value instead.
- Down payment. Enter either the dollar amount or the percentage, and the other field fills itself in. Anything under 20% adds mortgage insurance to your payment, which the calculator accounts for automatically.
- Loan term. Thirty years is the most common choice, but shorter terms cut your total interest substantially. Try 15 years and watch what happens to the total cost figure on the Amortization tab.
- Interest rate. Start from the national average if you are still early in the process. Once a lender has quoted you a rate, put that number in instead. Your quote will reflect your credit, your down payment and the loan program you qualify for.
- Taxes, insurance and fees. Open this section to adjust property taxes, homeowners insurance, HOA dues and mortgage insurance. The defaults are averages, so replacing them with real figures for the specific property makes your estimate far more useful.
The results panel splits into three views. Breakdown shows where each dollar of your monthly payment goes. Amortization shows your balance falling and your interest accumulating over the life of the loan, along with your payoff date and total cost. Schedule gives you the payment-by-payment detail, either summarized by year or listed month by month.
What makes up your monthly payment
Most people think of a mortgage payment as one number. It is really four, sometimes five, and lenders refer to the bundle as PITI.
- Principal. The portion that reduces what you owe. Early in a 30-year loan this is a small slice of your payment. It grows every single month.
- Interest. The cost of borrowing. In the first years of a long loan, most of your payment goes here, which is why the Amortization tab is worth looking at before you commit.
- Taxes. Property taxes are assessed locally and collected by your lender in an escrow account, then paid on your behalf. Rates vary widely from one county to the next, so a statewide or national average is only a starting point.
- Insurance. Homeowners insurance is required by every lender. Premiums depend on the home’s age, construction, roof, distance from a fire station and your claims history.
- Mortgage insurance. Required on most conventional loans when you put down less than 20%. It protects the lender, not you, and it comes off once you have built enough equity.
HOA dues are the common addition to that list. They are not part of PITI and they do not go through your lender, but they are a real monthly obligation and lenders count them when sizing your loan, so the calculator includes them.
Reading your results
Once you have a number, the useful work is testing it against a few scenarios.
Move the rate a half point. A 0.5% change on a $400,000 loan shifts the payment by roughly $130 a month and well over $45,000 across 30 years. This is the single biggest reason to compare offers from more than one lender rather than accepting the first quote.
Add an extra payment. Put $100 or $200 into the extra payment field. On a typical 30-year loan, $200 a month can shorten the term by six or seven years and save six figures in interest, because every extra dollar goes straight against principal and stops accruing interest permanently.
Compare 15 against 30. The 15-year payment looks intimidating next to the 30-year, often 40% or 50% higher. The total interest is usually less than half. Whether that trade is worth it depends on how much monthly flexibility you want to keep.
How much house can you afford?
A common starting point is the 28/36 rule: keep total housing costs at or below 28% of your gross monthly income, and all debt payments combined at or below 36%. On a $7,000 monthly gross income, that means roughly $1,960 for housing and $2,520 for everything including car loans, student loans and credit card minimums.
Treat that as a ceiling rather than a target. The rule says nothing about your childcare costs, your retirement contributions or how stable your income is. A payment that technically qualifies can still leave you with no room to absorb a furnace replacement.
If the number the calculator gives you feels tight, try a three-month test. Bank the difference between your current rent and the projected payment every month. If you barely notice it, the payment is realistic. If you find yourself dipping into it, look at a lower price point or spend a few more months building your down payment.
