Mortgage Calculator – Monthly Payment & Amortization

Mortgage Calculator – Estimate Your Monthly Payment

This free mortgage calculator works out your monthly mortgage payment and shows exactly where the money goes. Enter the home price, down payment, interest rate and loan term to get the principal and interest payment, then add property tax, homeowners insurance, private mortgage insurance (PMI) and HOA fees for your true monthly cost. You also get the total interest over the life of the loan, your payoff date, a chart of your loan balance and a full amortization schedule by year or by month that you can download as a CSV file.

The calculator goes further than most. It removes PMI automatically once your loan reaches 78% of the home's value, and it lets you model extra monthly, yearly or one-off payments so you can see how many years and how much interest you would save by overpaying. It works in dollars, pounds, euros, rupees and more, so it suits buyers in the US, UK, Canada, Australia, Europe and India.

How to Use the Mortgage Calculator

1. Enter the home price – the purchase price of the property.
2. Set your down payment as a percentage or an amount. The other box updates automatically.
3. Enter the interest rate and loan term. Use the rate from your lender's quote or a current average. Tap 15 yr or 30 yr for the most common US terms, or 25 yr for a typical UK mortgage.
4. Add taxes and insurance for a US-style PITI payment, or set them to 0 for principal and interest only.
5. Try extra payments to see how overpaying shortens the loan.
6. Review the results – monthly payment, total interest, payoff date, balance chart and amortization schedule.

The Mortgage Payment Formula

A standard repayment (amortizing) mortgage has a fixed monthly payment for principal and interest, calculated with this formula:

M = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)

where M is the monthly payment, P is the loan amount (price minus down payment), r is the monthly interest rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly payments (years × 12).

Example: a $400,000 home with 20% down gives a $320,000 loan. At 6.5% for 30 years, r = 0.065 ÷ 12 = 0.0054167 and n = 360. The monthly principal and interest is about $2,022.62. Over 30 years you pay about $408,000 in interest – more than the amount you borrowed.

What Is Included in a Mortgage Payment (PITI)

In the US, lenders talk about PITI: principal, interest, taxes and insurance. Most lenders collect property tax and homeowners insurance each month and hold them in an escrow account, paying the bills for you when they are due.

• Principal – the part that reduces your loan balance.
• Interest – the lender's charge for the loan. Early on, most of each payment is interest.
• Property tax – set by your county or city, typically 0.3% to 2.2% of the home's value per year in the US, averaging around 1%.
• Homeowners insurance – required by lenders; the cost depends on location, the home and the cover.
• PMI – private mortgage insurance, charged on conventional loans when you put down less than 20%.
• HOA fees – homeowners association dues for condos and planned communities, paid separately but part of your housing cost.

How Amortization Works

With a repayment mortgage, the monthly principal-and-interest payment stays the same, but the split changes every month. Interest is charged on the outstanding balance, so at the start – when the balance is highest – most of the payment goes to interest. As the balance falls, less interest is due and more of each payment goes to principal. On the example 30-year loan above, only about $289 of the first $2,023 payment reduces the balance; by the final year almost the whole payment is principal. The balance chart and amortization schedule above show this clearly.

15-Year vs 30-Year Mortgage

A shorter term means higher monthly payments but far less interest, and lenders usually offer a lower rate on 15-year loans. Here is the same $320,000 loan compared:

Term	Rate	Monthly P&I	Total interest
30 years	6.50%	$2,022.62	$408,142
20 years	6.25%	$2,338.97	$241,353
15 years	5.75%	$2,657.31	$158,316

The 30-year loan has the lowest payment and the most flexibility; the 15-year loan builds equity fastest and saves about $250,000 in interest. A middle path is to take a 30-year loan and make extra payments when you can – use the extra payments section to test this.

How Extra Payments Save Money

Every extra amount you pay goes straight to principal, which reduces the balance that future interest is charged on. On the example loan, paying an extra $200 a month cuts the term by about 6½ years and saves around $105,000 of interest. Before overpaying, check whether your mortgage has a prepayment penalty. In the UK, most fixed-rate deals allow overpayments of up to 10% of the balance each year without an early repayment charge; in the US, most modern loans have no prepayment penalty; and in India, the RBI does not allow banks to charge foreclosure or prepayment penalties on floating-rate home loans to individuals.

PMI: When You Pay It and How to Remove It

On US conventional loans, lenders require PMI when your down payment is below 20%. It usually costs 0.3% to 1.5% of the loan amount per year, depending on your credit score and down payment. Under the Homeowners Protection Act, PMI must be cancelled automatically when your balance is scheduled to reach 78% of the original home value, and you can ask for it to be removed at 80%. FHA loans use a different mortgage insurance premium (MIP) that often lasts for the life of the loan. This calculator applies PMI only while the balance is above 80% of the price and drops it at 78%.

How Much House Can You Afford?

A common guideline is the 28/36 rule: spend no more than 28% of your gross monthly income on housing costs (PITI) and no more than 36% on all debt payments combined. With a total payment of $2,700 a month, you would want a gross income of around $9,650 a month, or about $116,000 a year. Lenders also look at your credit score, savings, job stability and the loan-to-value ratio. In the UK, lenders typically offer 4 to 4.5 times your annual income, and in India banks usually limit the EMI to about 40–50% of net monthly income. For Indian home loans with EMI tables, you can also use our EMI calculator.

Mortgages in the UK, Canada, Australia and India

• UK: mortgages are usually 25–35 years with a 2- or 5-year fixed rate that then moves to the lender's standard variable rate. Property tax (council tax) and buildings insurance are paid separately, so set tax and insurance to 0 and PMI to 0. Stamp Duty Land Tax is paid once on purchase.
• Canada: amortization is commonly 25 years (30 for some buyers) with 5-year terms. Mortgage default insurance is required below 20% down and is added to the loan, not paid monthly.
• Australia: 30-year loans are standard, often variable-rate, with offset accounts. Lenders mortgage insurance (LMI) applies below 20% deposit and is usually paid upfront.
• India: home loans run up to 30 years, mostly on floating rates linked to the repo rate. Set tax, insurance and PMI to 0 and choose ₹ for an EMI-style result.

Fixed-Rate vs Adjustable-Rate Mortgages

A fixed-rate mortgage keeps the same interest rate for the whole term (US) or for the fixed period (UK), so your principal-and-interest payment never changes. An adjustable-rate mortgage (ARM), such as a 5/1 or 7/1 ARM, starts with a fixed rate for a few years and then adjusts periodically based on a market index. ARMs often start with a lower rate, but your payment can rise later. To estimate an ARM, calculate the fixed period at the starting rate and then re-run the calculator with the remaining balance and a higher rate.

Tips to Lower Your Mortgage Payment

• Raise your credit score before applying – a better score can lower your rate and your PMI.
• Put down 20% or more to avoid PMI entirely.
• Compare at least three lenders and look at the APR, which includes fees, not just the rate.
• Consider buying points – paying upfront to reduce the rate makes sense if you will keep the loan long enough to break even.
• Challenge your property tax assessment if it seems too high, and shop around for insurance each year.
• Refinance when rates drop meaningfully below your current rate, after allowing for closing costs.

Frequently Asked Questions

Note: Results are estimates for a fixed-rate repayment mortgage and do not include closing costs, points or rate changes. Your lender's Loan Estimate or mortgage offer shows the exact figures.