How to Use the Mortgage Calculator

Enter the home price, down payment, annual interest rate, and loan term to calculate your monthly mortgage payment instantly. You can also add property tax and home insurance to get a complete picture of your total monthly housing cost.

Mortgage Formula

M = P × [r(1+r)ⁿ] / [(1+r)ⁿ - 1]
Where: M = monthly payment, P = principal loan amount, r = monthly interest rate, n = number of payments

Understanding Your Mortgage

A mortgage consists of the principal (the amount you borrowed) and interest (the cost of borrowing). In the early years of your mortgage, most of your payment goes toward interest. Over time, a larger portion goes toward reducing the principal — this is called amortization.

Your down payment directly affects your loan amount. A larger down payment means a smaller loan, lower monthly payments, and less total interest paid over the life of the loan. Putting down 20% or more also helps you avoid Private Mortgage Insurance (PMI).

Tips for Getting a Better Mortgage Rate

  • Improve your credit score before applying — even a 0.5% rate difference saves thousands over 30 years
  • Compare offers from at least 3 lenders
  • Consider a 15-year mortgage if you can afford higher payments — you'll save significantly on interest
  • Lock your rate when rates are favorable

Frequently Asked Questions

What is a good mortgage interest rate? ▼
A good mortgage rate depends on the economic environment, your credit score, and loan type. Generally, rates within 0.5% of the national average are considered good. Always compare multiple lenders to find the best rate for your situation.
How much house can I afford? ▼
A common guideline is that your total housing cost (mortgage, taxes, insurance) should not exceed 28% of your gross monthly income. Your total debt payments should not exceed 36% of gross income.
What is the difference between fixed and adjustable rate mortgages? ▼
A fixed-rate mortgage has the same interest rate for the entire loan term, making payments predictable. An adjustable-rate mortgage (ARM) starts with a fixed rate for a period, then adjusts periodically based on market rates — which can go up or down.
Should I make extra mortgage payments? ▼
Yes! Making extra payments directly reduces your principal, which means less interest over time and a shorter loan term. Even one extra payment per year can save years off your mortgage and thousands in interest.