Use our best mortgage calculator to quickly estimate your monthly payment and total interest paid based on the loan principal, interest rate, and term. Planning your biggest investment starts here.
Best Mortgage Calculator
Your Estimated Monthly Payment:
$1,580.17
Total Interest Paid:
Detailed Calculation Steps
Press ‘Calculate’ to see the detailed amortization breakdown.
Mortgage Payment Formula
The standard formula used to calculate a fixed-rate mortgage payment is based on the annuity formula. It determines the monthly payment required to amortize the loan over the defined term.
M = P [ i (1 + i)^n ] / [ (1 + i)^n – 1 ]
Where: M = Monthly Payment, P = Principal Loan Amount, i = Monthly Interest Rate, n = Total number of payments.
Formula Source: Investopedia, Related Topic: Khan Academy
Variables Explained
Understanding the inputs is crucial for accurate results:
- Loan Principal: The total amount of money borrowed from the lender.
- Annual Interest Rate: The nominal annual interest rate (e.g., 6.5%). The calculator converts this to a monthly rate for the formula.
- Loan Term (Years): The duration over which the loan is scheduled to be repaid (e.g., 15 years, 30 years).
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What is the Best Mortgage Calculator?
A mortgage calculator is a vital online tool that helps prospective and current homeowners estimate the costs associated with a mortgage. By inputting the loan amount, interest rate, and repayment term, the calculator quickly computes the required monthly principal and interest payment.
The “best” calculators go beyond simple payment estimation. They factor in variables like property taxes, homeowner’s insurance (PITI), and PMI, and display a full amortization schedule, allowing users to see exactly how much of their payment goes toward interest versus principal over the life of the loan. This transparency is crucial for long-term financial planning and budget assessment.
How to Calculate Your Mortgage Payment (Example)
Follow these steps to understand how your mortgage payment is derived:
- Identify Variables: Let’s use an example: Principal (P) = $300,000; Annual Rate (R) = 7%; Term (Y) = 30 Years.
- Calculate Monthly Rate (i): Divide the annual rate by 12 and 100: 7 / 12 / 100 = 0.005833.
- Calculate Total Payments (n): Multiply the term by 12: 30 * 12 = 360 payments.
- Plug into Formula: Substitute P, i, and n into the formula
M = P [ i (1 + i)^n ] / [ (1 + i)^n – 1 ]. - Result: In this example, the result is a monthly payment (M) of $1,995.56.
Frequently Asked Questions (FAQ)
No, this calculator strictly computes the Principal and Interest (P&I) portion. PITI (Principal, Interest, Taxes, Insurance) includes property taxes and homeowners insurance, which are highly location-dependent and must be factored into your total housing budget separately.
An amortization schedule is a table that shows every single payment made on a loan, detailing how much goes toward the principal and how much goes toward interest for the entire life of the loan.
Yes, absolutely. Any extra payment designated towards the principal reduces the total loan balance, which means less interest accrues on the remaining balance over time, shortening the loan term.
This tool uses the Annual Interest Rate you manually input. It does not pull live market rates, allowing you to model various interest rate scenarios.