A mortgage is likely the largest loan you will ever take on, and even a small difference in rate or term can change what you pay by tens of thousands of dollars. This mortgage calculator turns the four numbers that matter most — home price, down payment, interest rate, and loan term — into a clear monthly payment and a complete picture of what the loan actually costs you over its lifetime.
How this calculator works
Enter the home price and your down payment to set the loan amount (price minus down payment). Add the annual interest rate your lender quoted and choose a term, usually 15 or 30 years. The calculator computes your principal-and-interest payment, then adds estimated property taxes and homeowner's insurance so the number you see is closer to your real monthly obligation rather than just the loan portion.
The formula behind your payment
Monthly principal and interest follows the standard amortization formula: M = P · [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments (years × 12). Because interest is charged on the remaining balance, your early payments are mostly interest and your later payments are mostly principal — which is why an amortization schedule looks so lopsided at the start.
A worked example
Suppose you buy a $400,000 home with 20% down ($80,000), leaving a $320,000 loan at 6.5% over 30 years. The monthly principal and interest works out to roughly $2,022. Over the full 30 years you would pay about $408,000 in interest alone — more than the original loan. Shorten the term to 15 years and the payment rises to about $2,787, but total interest drops to roughly $181,000, saving you well over $200,000.
Tips to lower what you pay
- Put down 20% when you can to avoid private mortgage insurance (PMI), which adds to your payment without building equity.
- Compare a 15-year term against a 30-year term — the higher payment often comes with a lower rate and far less lifetime interest.
- Even one extra payment per year shortens a 30-year loan by several years and saves thousands in interest.
- Shop at least three lenders; rate quotes vary more than most buyers expect, and a 0.25% difference is real money over decades.