Fact Check: This calculator and its formulas were reviewed by David Chen, CFA (Chartered Financial Analyst) on December 4, 2025.
Use the ultimate Home Mortgage Loan Calculator to instantly estimate your monthly payments, total interest paid, and total loan cost. Understanding these figures is the crucial first step in your home-buying journey.
Home Mortgage Loan Calculator
Estimated Monthly Payment:
$0.00Home Mortgage Loan Calculator Formula
The standard formula used to calculate the fixed monthly payment ($M$) for an amortizing loan is based on the principal, the interest rate, and the loan term.
Where:
M = Monthly Payment
P = Principal Loan Amount
i = Monthly Interest Rate (Annual Rate / 12)
n = Total Number of Payments (Loan Term in Years * 12)
Variables Explained
Here is a breakdown of the variables required by the calculator:
- Loan Principal ($): The initial amount of money you are borrowing. This is the house purchase price minus any down payment.
- Annual Interest Rate (%): The yearly percentage rate charged by the lender for the use of the money. Note: This is converted to a monthly rate for calculation.
- Loan Term (Years): The duration over which the loan is scheduled to be repaid. Common terms are 15 or 30 years.
- Monthly Payment ($): The fixed amount you will pay every month until the loan is fully paid off.
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What is a Home Mortgage Loan Calculator?
A Home Mortgage Loan Calculator is a financial tool that helps prospective homeowners estimate the cost of borrowing money to purchase a house. It takes key inputs—the principal loan amount, the annual interest rate, and the loan term—and outputs the fixed monthly payment required to fully amortize (pay off) the loan over the defined period.
The core value of this calculator is transparency. It quickly demonstrates the long-term commitment of a mortgage, allowing users to see how changing just one variable (like switching from a 30-year to a 15-year term, or finding a lower interest rate) can drastically affect both the monthly burden and the total interest paid over the life of the loan. This is essential for budgeting and making informed decisions before speaking with a lender.
How to Calculate Monthly Payment (Example)
Follow these steps using the formula for a $200,000 loan at 4.5% interest over 30 years:
- Determine the Monthly Rate ($i$): Convert the annual rate to a monthly decimal: $4.5\% / 100 / 12 = 0.00375$.
- Determine the Total Payments ($n$): Multiply the term by 12: $30 \text{ years} \times 12 = 360$ payments.
- Calculate the Amortization Factor: Compute the term $(1 + i)^n$, which is $(1 + 0.00375)^{360} \approx 3.828$.
- Apply the Formula: Plug the values into the formula: $M = 200,000 \times [ 0.00375 \times 3.828 / (3.828 – 1) ]$.
- Result: $M \approx \$1,013.37$. This is the fixed monthly principal and interest payment.
Frequently Asked Questions (FAQ)
- How much total interest will I pay?
You can calculate the total interest by multiplying the monthly payment by the total number of payments, and then subtracting the original loan principal. - Does this calculator include property taxes and insurance?
No. This calculator only estimates the principal and interest payment. Your actual total monthly housing expense (PITI – Principal, Interest, Taxes, Insurance) will be higher. - What is the difference between APR and Interest Rate?
The Annual Interest Rate is the simple rate applied to the loan. The Annual Percentage Rate (APR) includes the interest rate plus certain other fees and closing costs, giving you a truer cost of borrowing. - Should I choose a 15-year or 30-year mortgage?
The 15-year term typically offers a lower interest rate and saves you significant interest overall, but the monthly payment will be substantially higher than a 30-year term.