Home Loan Calculator Mortgage Calculator

Fact-Checked & Reviewed by: David Chen, CFA

Use our advanced **Home Loan Calculator / Mortgage Calculator** to instantly estimate your monthly payments, total interest paid, and the full cost of your home financing. Accurate planning starts here.

Mortgage Payment Calculator

Estimated Monthly Payment (P&I)

$0.00

Total Interest Paid: $0.00
Total Cost of Loan: $0.00

Home Loan / Mortgage Payment Formula

M = P [ i(1 + i)ⁿ / ((1 + i)ⁿ - 1) ]

Formula Source: Wikipedia – Mortgage Calculator, Investopedia – Calculating Payments

Variables Explained

• M: Estimated monthly loan payment (Principal + Interest).
• P: Principal Loan Amount, calculated as (Home Price – Down Payment).
• i: Monthly interest rate, calculated as (Annual Rate / 12 / 100).
• n: Total number of payments, calculated as (Loan Term in Years × 12).

Related Financial Calculators

• Amortization Schedule Calculator
• Debt-to-Income Ratio Calculator
• Refinance Savings Calculator
• Early Mortgage Payoff Calculator

What is a Home Loan Calculator / Mortgage Calculator?

A home loan calculator, often synonymous with a mortgage calculator, is an essential financial tool designed to help potential homeowners and existing borrowers estimate their monthly loan payments. By factoring in the principal loan amount, the annual interest rate, and the loan term, the calculator provides a clear financial picture.

The primary function is to solve the complex mathematical formula that determines the monthly amount required to fully pay off a loan over a set period. This estimation typically includes the principal and interest (P&I), helping users budget effectively and understand the long-term cost implications of borrowing.

How to Calculate Monthly Payments (Example)

Let’s use an example to illustrate the process of calculating a monthly mortgage payment:

1. Determine the Principal (P): Assume a Home Price of $300,000 and a Down Payment of $60,000. The Principal (P) is $240,000.
2. Find the Monthly Rate (i): If the Annual Rate is 6.5%, the monthly rate (i) is 6.5 / 100 / 12, or 0.005417.
3. Calculate Total Payments (n): For a 30-year term, the total number of payments (n) is 30 years × 12 months/year = 360 payments.
4. Apply the Formula: Plug these values into the mortgage formula to find the Monthly Payment (M). In this case, M would be approximately $1,516.85.
5. Calculate Total Interest: Total payments ($1,516.85 × 360) minus the Principal ($240,000) gives the total interest paid over the life of the loan.

Frequently Asked Questions (FAQ)

Is the monthly payment calculated only P&I?
Yes, this calculator strictly calculates the principal and interest (P&I) portion. It does not include escrow costs like property taxes or home insurance (PITI).

What is amortization?
Amortization is the process of paying off a debt over time in regular installments. In a mortgage, early payments primarily cover interest, while later payments focus more on the principal.

Does a longer loan term save me money?
A longer term (like 30 years vs. 15 years) results in a lower monthly payment, but you will pay significantly more in total interest over the life of the loan.

What is a good down payment percentage?
While 20% is traditionally recommended to avoid Private Mortgage Insurance (PMI), a down payment as low as 3-5% is common, though it incurs extra costs.