Welcome to the ultimate mortgage calculator. Quickly determine your estimated monthly payment, total interest paid, and total repayment amount based on your loan principal, annual interest rate, and term in years.
Mortgage Calculator
Estimated Monthly Payment
$0.00
Total Interest Paid: $0.00
Total Repayment: $0.00
Mortgage Calculator Formula
The standard formula for calculating the fixed monthly payment ($M$) of an amortizing loan is:
$$ M = P \frac{r (1 + r)^n}{(1 + r)^n – 1} $$
Where:
- P: Principal Loan Amount
- r: Monthly Interest Rate (Annual Rate / 12 / 100)
- n: Total Number of Payments (Loan Term in Years × 12)
Formula Sources: Investopedia, Khan Academy
Variables Explained
Understanding the inputs is key to using the calculator:
- Principal Loan Amount ($): The total amount of money borrowed.
- Annual Interest Rate (%): The yearly percentage rate charged on the loan.
- Loan Term (Years): The length of time over which you agree to repay the loan.
What is a Mortgage Calculator?
A mortgage calculator is an online tool that helps prospective homeowners and refinancers estimate their future monthly housing costs. By inputting the loan amount, interest rate, and term, the calculator uses the standard amortization formula to quickly provide a precise monthly payment figure.
This tool is essential for budget planning, allowing borrowers to understand the financial implications of different loan scenarios, such as comparing a 15-year versus a 30-year term, or seeing the impact of a slightly higher interest rate. It breaks down the total cost, separating the principal repayment from the accrued interest.
How to Calculate a Mortgage Payment (Example)
- Determine the Inputs: Assume a Principal ($P$) of $300,000, an Annual Rate ($R$) of 4.5%, and a Term ($Y$) of 30 years.
- Calculate Monthly Rate ($r$): Divide the annual rate by 12 and 100: $r = 4.5 / 100 / 12 = 0.00375$.
- Calculate Total Payments ($n$): Multiply the term by 12: $n = 30 \times 12 = 360$ months.
- Apply the Formula: Substitute these values into the formula to find the monthly payment ($M$).
- Determine Total Repayment: Multiply the monthly payment ($M$) by the total number of payments ($n$).
- Calculate Total Interest: Subtract the Principal ($P$) from the Total Repayment.
Frequently Asked Questions (FAQ)
What does ‘P&I’ mean in a mortgage payment?
P&I stands for Principal and Interest. This is the portion of your monthly payment that goes towards paying down the loan balance (Principal) and covering the interest charged by the lender (Interest). It excludes property taxes, insurance, and HOA fees (which make up the full ‘PITI’ payment).
Does this calculator include property taxes and insurance?
No, this calculator strictly calculates the Principal and Interest (P&I) portion of your payment using the loan’s amortization schedule. Taxes and insurance vary widely by location and must be added separately to determine your total housing expense.
How much interest will I pay over the life of a loan?
The total interest paid is calculated by taking your total repayment amount (Monthly Payment × Total Months) and subtracting the original Principal Loan Amount. Our calculator provides this exact figure for your scenario.
What is amortization?
Amortization is the process of gradually paying off a debt over time in fixed installments. Early in a mortgage, a larger portion of your monthly payment goes toward interest, and later, a larger portion goes toward paying down the principal.