Mortgage Payment Calculator
Calculate monthly mortgage payments and loan details
How to Use
- Enter the home price or loan amount
- Set your down payment percentage
- Enter the interest rate and loan term
- Add property taxes and insurance costs
- View detailed payment breakdown
What is a Mortgage?
A mortgage is a loan used to purchase or maintain a home, land, or other types of real estate. The borrower agrees to pay the lender over time, typically in a series of regular payments that are divided into principal and interest.
The property serves as collateral to secure the loan. If the borrower stops making payments, the lender can take possession of the property through a legal process called foreclosure.
Mortgage Payment Components
Principal & Interest (P&I)
The principal is the amount you borrowed, and interest is the cost of borrowing that money. Early in your loan, most of your payment goes toward interest.
Property Taxes
Property taxes are collected by local governments to fund schools, roads, and other municipal services. They're typically paid annually but often collected monthly as part of your mortgage payment.
Homeowners Insurance
This protects your home and belongings from damage. Most lenders require homeowners insurance, and it's often included in your monthly mortgage payment.
Private Mortgage Insurance (PMI)
If you put down less than 20% of the home's value, you'll likely need to pay PMI. This protects the lender if you default on your loan.
Understanding Amortization
Amortization is the process of paying off your mortgage over time through regular payments. Each payment covers both principal and interest, but the proportion changes over the life of the loan.
- Early payments: Most goes to interest, less to principal
- Later payments: More goes to principal, less to interest
- This is why making extra principal payments early can save significant interest
Factors Affecting Your Payment
- Loan amount: Higher loan = higher payment
- Interest rate: Higher rate = higher payment
- Loan term: Longer term = lower monthly payment but more total interest
- Down payment: Higher down payment = lower loan amount and no PMI
- Property taxes and insurance: Vary by location and home value
Tips for Better Mortgage Management
- Shop around with multiple lenders for the best rate
- Consider making extra principal payments to save on interest
- Maintain good credit to qualify for better rates
- Save for a larger down payment to avoid PMI
- Consider the total cost of homeownership, not just the mortgage
- Get pre-approved before house hunting to know your budget
Frequently Asked Questions
- What costs does the monthly payment include?
- The calculator shows principal and interest plus any property taxes, homeowners insurance, and PMI amounts you enter. Taxes and insurance are converted from annual values to monthly averages.
- How should I estimate taxes and insurance?
- Use the most recent annual property tax bill and homeowners insurance premium you have. Enter their yearly totals and the calculator spreads them across 12 months.
- Does this work for adjustable-rate mortgages?
- The payment formula assumes a fixed interest rate. For an adjustable-rate mortgage you can model scenarios by entering the introductory rate now and revisiting the calculator when the rate changes.
- How can I lower my monthly mortgage payment?
- A larger down payment, a longer loan term, improving your credit score, shopping for better rates, or reducing taxes and insurance can all lower the monthly amount.