How to Calculate Your Monthly Mortgage Payment
Our mortgage payment calculator helps you estimate the total monthly cost of owning a home. Simply enter your home price, down payment, loan term, interest rate, and estimated property taxes and insurance to get an accurate breakdown.
Home Price — the purchase price of the property you are buying or considering. This is the full market value before subtracting your down payment.
Down Payment — the amount you pay upfront at closing. A larger down payment reduces your loan amount and may help you avoid private mortgage insurance (PMI). Most conventional loans require at least 3-5% down, while FHA loans require 3.5%.
Loan Term — the number of years over which you repay the mortgage. Common terms are 15 and 30 years. A shorter term means higher monthly payments but significantly less total interest paid over the life of the loan.
Interest Rate — your annual mortgage interest rate. Even a small difference in rate can save or cost you tens of thousands of dollars. Be sure to compare offers from multiple lenders to find the best rate.
After clicking Calculate, you will see your estimated monthly payment, a breakdown of principal vs. interest, and a full amortization schedule showing how your balance decreases over time.
Understanding the Mortgage Payment Formula
The standard formula for calculating a fixed-rate monthly mortgage payment is:
M = P × [r(1 + r)n] / [(1 + r)n − 1]
- M = monthly payment (principal and interest only)
- P = loan principal (home price minus down payment)
- r = monthly interest rate (annual rate ÷ 12)
- n = total number of payments (loan term in years × 12)
Keep in mind that your actual monthly housing cost includes more than just principal and interest. Property taxes, homeowners insurance, and possibly PMI and HOA dues all add to your total monthly obligation. Lenders often refer to this as PITI — principal, interest, taxes, and insurance.
Understanding this formula helps you see why even a 0.25% change in interest rate can shift your monthly payment by $40 or more on a $300,000 loan. Over 30 years, that adds up to more than $14,000 in additional interest.
15-Year vs. 30-Year Mortgage: Which Is Better?
Choosing between a 15-year and 30-year mortgage is one of the biggest financial decisions homebuyers face. Here is a comparison on a $280,000 loan at current typical rates:
| Feature | 15-Year Mortgage | 30-Year Mortgage |
|---|---|---|
| Interest Rate | 5.75% | 6.50% |
| Monthly Payment | $2,326 | $1,770 |
| Total Interest Paid | $138,680 | $357,200 |
| Total Cost | $418,680 | $637,200 |
A 15-year mortgage saves over $218,000 in interest but requires $556 more per month. The right choice depends on your budget, other financial goals, and whether you can invest the monthly savings from a 30-year mortgage at a higher return than your mortgage rate.