Use this comprehensive mortgage payment calculator to quickly estimate your monthly housing cost, total interest paid, and build a full amortization schedule. Understanding your payment breakdown is the first step toward smart financial planning.
Calculate My Mortgage Payment
Estimated Monthly Payment:
$0.00Calculation Summary & Amortization
Mortgage Payment Formula
Source: Investopedia, CFPB
Variables Explained
- M: Monthly Payment (The amount you pay each month).
- P (Principal Loan Amount): The initial amount borrowed. Input via the “Loan Amount” field.
- i: Monthly Interest Rate (Annual Rate / 12 / 100). Input via the “Annual Interest Rate” field.
- n: Total Number of Payments (Loan Term in years × 12). Input via the “Loan Term” field.
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What is a Mortgage Payment?
A mortgage payment is the monthly sum a borrower pays to a lender for a home loan. The payment is primarily split into two components: principal (the amount you borrowed) and interest (the cost of borrowing the money). Early in the loan term, a larger portion of the payment goes toward interest, while later payments allocate more money towards reducing the principal.
The calculation provided by this tool assumes a fixed-rate, fully amortizing loan, meaning the monthly payment amount remains constant throughout the loan term, and the principal will be fully paid off by the end of the term.
How to Calculate Mortgage Payment (Example)
- Determine Variables: Start with $P = \$300,000$, Annual Rate $r = 6.0\%$, and Term $Y = 30$ years.
- Convert to Monthly Rate ($i$): $i = (6.0\% / 100) / 12 = 0.005$.
- Calculate Total Payments ($n$): $n = 30 \text{ years} \times 12 \text{ months/year} = 360$.
- Apply Formula: Substitute these values into the formula to find the monthly payment $M$. The result in this example is $M \approx \$1,798.65$.
- Calculate Total Cost: Multiply the monthly payment by the total number of payments ($360 \times \$1,798.65 = \$647,514.00$).
- Find Total Interest: Subtract the principal from the total cost ($\$647,514.00 – \$300,000 = \$347,514.00$).
Frequently Asked Questions (FAQ)
How much of my payment goes to principal vs. interest?
Initially, the vast majority of your payment goes to interest. As the loan principal decreases over time (a process called amortization), the interest component shrinks, and the portion dedicated to principal repayment increases.
Does this calculator include property taxes and insurance?
No. This calculator only estimates the P&I (Principal and Interest) portion of your payment. For your full monthly housing expense, you must add escrow payments for property taxes and homeowner’s insurance (often referred to as PITI).
What is an amortization schedule?
It’s a table detailing every single payment of the loan. For each payment, it shows how much goes toward the principal, how much goes toward interest, and the remaining loan balance.
Can I pay off my mortgage early?
Yes. By making extra principal payments, you can significantly reduce the total interest paid and shorten the life of your loan. Check your loan agreement for any prepayment penalties.