Use this comprehensive US Mortgage Calculator to quickly estimate your monthly principal and interest payments. Understanding your monthly obligation is the critical first step in financial planning for homeownership.
US Mortgage Payment Calculator
Estimated Monthly Payment (P&I):
$0.00US Mortgage Calculator Formula
The standard formula used to calculate the monthly principal and interest (P&I) payment for a fixed-rate mortgage is:
M = P [ r(1 + r)^n / ((1 + r)^n - 1) ]
Source 1: Investopedia
Source 2: Consumer Financial Protection Bureau
Variables Explained
Here is what each input field represents in the calculation:
- Loan Principal Amount (P): The initial amount borrowed from the lender. This is the purchase price minus your down payment.
- Annual Interest Rate (R): The yearly rate of interest expressed as a percentage. This is used to derive the monthly rate (r).
- Loan Term (Y): The length of time, in years, over which the loan is to be repaid (e.g., 15 years or 30 years). This is converted to the total number of monthly payments (n).
- Monthly Payment (M): The final calculated result, which includes both the principal and interest components.
Related Calculators
Explore other financial tools to plan your home purchase:
- Down Payment Savings Goal Calculator
- Mortgage Refinance Break-Even Point Tool
- Home Affordability Tool (DTI Ratio)
- Annual Property Tax Estimator
What is a US Mortgage Calculator?
A US Mortgage Calculator is a financial tool designed to estimate the periodic payment required to repay a loan (mortgage) based on the loan’s principal amount, the annual interest rate, and the loan term. It specifically solves for the monthly principal and interest (P&I) portion of your overall housing expense. This estimation is vital for prospective homeowners to budget accurately and determine long-term affordability.
The calculated payment assumes a fixed-rate mortgage, meaning the interest rate remains constant throughout the life of the loan. It does not typically include escrow items like property taxes, homeowner’s insurance, or potential private mortgage insurance (PMI), which must be added separately to determine the true total monthly housing cost.
How to Calculate a US Mortgage Payment (Example)
Let’s find the monthly payment for a $300,000 loan at a 6.0% annual rate over a 30-year term.
- Define Variables: Principal (P) = $300,000; Annual Rate (R) = 6.0%; Term (Y) = 30 years.
- Convert Rate: Calculate the monthly interest rate (r): $r = (0.06 / 12) = 0.005$.
- Convert Term: Calculate the total number of payments (n): $n = 30 \times 12 = 360$ months.
- Apply Formula (Exponent): Calculate the compounding factor $(1+r)^n = (1.005)^{360} \approx 6.022575$.
- Calculate M: $M = \$300,000 \times [ (0.005 \times 6.022575) / (6.022575 – 1) ]$.
- Final Result: The resulting Monthly Payment (M) is approximately $1,798.65.
Frequently Asked Questions (FAQ)
Is the calculated monthly payment my final bill?
No. The calculator estimates the Principal and Interest (P&I) portion. Your final monthly bill will often include escrowed funds for Property Taxes and Homeowner’s Insurance (PITI).
How does a 15-year term compare to a 30-year term?
A 15-year term has a higher monthly payment but results in significantly less total interest paid over the life of the loan, allowing you to build equity much faster.
What is Private Mortgage Insurance (PMI)?
PMI is an insurance premium required if your down payment is less than 20% of the home’s purchase price. It protects the lender, not the borrower, and is added to your monthly payment until you reach 20% equity.
Does this calculator work for Adjustable-Rate Mortgages (ARMs)?
This calculator is best suited for fixed-rate mortgages. While it can calculate the initial payment period for an ARM, the payment will change once the adjustable period begins.