Mortgage Calculator

How to Use This Mortgage Calculator

Using this free mortgage calculator is quick. Enter the home price (the agreed purchase price), your planned down payment (in dollars or as a percentage), choose your loan term, and type in the interest rate your lender has quoted. Click Calculate Mortgage Payment and your monthly payment, total interest paid, and a year-by-year amortization table appear instantly — no account, no email, no cost.

What Goes Into Your Monthly Mortgage Payment

This calculator shows your principal and interest payment — the core of your mortgage bill. But your true monthly housing cost will typically be higher. Most lenders collect property taxes and homeowner's insurance through an escrow account, bundling them into a single monthly payment alongside your P&I. If your down payment is under 20%, Private Mortgage Insurance (PMI) is usually added as well.

A common guideline is to keep total housing costs — including taxes, insurance, and PMI — below 28% of your gross monthly income. Use this calculator to understand the P&I portion, then ask your lender for a full payment estimate that includes all escrow items.

How Much Down Payment Do You Need?

The minimum down payment for a conventional loan is typically 3–5%. Here's what the most common thresholds mean for your loan:

• 3–5%: Minimum for most conventional loans. PMI is required, typically adding $50–$200 per month to your total payment.
• 10%: Reduces your loan balance, lowers PMI premiums, and often improves your interest rate.
• 20%: The industry benchmark. Eliminates PMI entirely and qualifies you for the best available rates. Every dollar above 20% reduces the loan amount — and the decades of interest that will accrue on it.

FHA loans allow down payments as low as 3.5% with a 580+ credit score, but carry their own mortgage insurance costs. The larger your down payment, the lower your monthly payment and the less you pay in total interest over the life of the loan.

15-Year vs. 30-Year Mortgage: Which Is Right for You?

Your loan term has the largest single impact on how much you ultimately pay. On a $400,000 loan at 7%:

• 30-year mortgage: Monthly payment ~$2,661. Total interest paid: ~$558,000.
• 15-year mortgage: Monthly payment ~$3,595. Total interest paid: ~$247,000.

That's roughly $311,000 in interest savings for a $934 higher monthly payment. If your budget can comfortably handle the higher payment, a 15-year mortgage is almost always the financially superior choice — and lenders typically offer lower rates on shorter terms, amplifying the savings further. If cash flow is tighter, the 30-year loan keeps monthly costs manageable, and you can always make voluntary extra principal payments to accelerate payoff when your finances allow.

What Counts as a Good Mortgage Interest Rate?

Mortgage rates change daily based on bond markets, Federal Reserve policy, inflation data, and lender-specific factors. Your personal rate depends on your credit score, debt-to-income ratio, down payment size, loan type, and loan term. A few guidelines:

• A rate within 0.25–0.5% of the published national average for your loan type is competitive.
• Raising your credit score by 50–100 points before applying can reduce your rate by 0.25–0.5%, potentially saving tens of thousands over the loan's life.
• Getting quotes from at least 3–5 lenders is strongly recommended — rates vary significantly, and competing offers give you leverage to negotiate.

Use this calculator to model the impact of different rate scenarios. Even a half-point difference on a $400,000 loan over 30 years changes total interest paid by more than $60,000.

Common Mistakes First-Time Homebuyers Make

• Skipping rate shopping. Many buyers accept the first rate quoted to them. Spending a few hours getting 3–5 competing quotes often saves thousands of dollars annually.
• Underestimating total costs. Property taxes, homeowner's insurance, HOA fees, and maintenance can add significantly to monthly costs beyond the mortgage payment alone.
• Borrowing the maximum pre-approved amount. Being approved for a loan amount doesn't mean you should borrow that much. Leave a buffer for unexpected expenses and lifestyle flexibility.
• Ignoring the loan term trade-off. Choosing a 30-year loan purely for a lower payment without considering total interest cost is expensive if you can afford a shorter term.
• Not improving credit before applying. Waiting 6–12 months to raise your credit score before applying can meaningfully lower your rate and save significant money over the life of the loan.

When Should You Talk to a Mortgage Advisor?

This calculator is a powerful starting point for understanding your numbers. You should speak with a licensed mortgage professional when you're ready to get pre-approved, when you're comparing loan types (conventional vs. FHA vs. VA vs. USDA), when your financial situation is complex (self-employed income, investment properties, past credit issues), or any time you're making an actual financing decision. A mortgage advisor can also identify programs you may qualify for — first-time homebuyer assistance, rate buy-down options, state housing authority programs — that no online calculator can surface.