Reviewed and Fact-Checked by: David Chen, CFA. Updated: Dec 2025.
Use this precise and easy-to-use calculator to determine your estimated monthly mortgage payment, helping you budget for your new home or analyze refinancing options.
How Can I Calculate a Mortgage?
Estimated Monthly Principal & Interest Payment:
Detailed Calculation Steps
Press ‘Calculate Payment’ to see the detailed steps here.
How Can I Calculate a Mortgage Formula?
The standard fixed-rate mortgage payment formula is:
$$M = P \frac{r(1 + r)^n}{(1 + r)^n – 1}$$
Where:
- M = Estimated Monthly Payment
- P = Principal Loan Amount
- r = Monthly Interest Rate (Annual Rate / 12 / 100)
- n = Total Number of Payments (Loan Term in Years × 12)
Formula Source & Resource 1 | Resource 2
Variables Explained
Understanding the input variables is essential for accurate calculations.
- Loan Amount (Principal): The total amount of money borrowed. This is the home price minus any down payment.
- Annual Interest Rate (%): The yearly cost of borrowing money, expressed as a percentage. This value is used to determine the monthly rate.
- Loan Term (Years): The length of time over which you agree to repay the loan (e.g., 15 years, 30 years).
Related Calculators
Explore other financial tools to assist with your home buying or refinancing decisions:
- Mortgage Refinance Breakeven Calculator
- Loan Amortization Schedule Planner
- Bi-Weekly Payment Savings Calculator
- Home Equity Line of Credit (HELOC) Interest Forecaster
What is “How Can I Calculate a Mortgage”?
Calculating your mortgage payment involves determining the fixed monthly amount needed to pay off both the principal loan amount and the accrued interest over the life of the loan. This calculation typically results in the Principal and Interest (P&I) portion of your total monthly housing payment.
The calculation assumes a fixed interest rate and amortizes the loan, meaning that in the early years, a larger portion of your payment goes toward interest, while in the later years, a greater portion reduces the principal balance. This calculator provides a precise estimate of that P&I component.
How to Calculate a Mortgage Payment (Example)
Let’s use an example to illustrate the steps involved in determining your monthly payment:
- Define Variables: Assume a loan amount (P) of $200,000, an annual rate of 5.0%, and a term of 30 years.
- Calculate Monthly Rate (r): Convert the annual rate to a monthly decimal: $r = (5.0 / 100) / 12 = 0.004167$.
- Calculate Total Payments (n): Determine the total number of payments: $n = 30 \text{ years} \times 12 = 360$.
- Apply Formula: Substitute these values into the formula to find the monthly payment (M): $M = 200,000 \times \frac{0.004167(1 + 0.004167)^{360}}{(1 + 0.004167)^{360} – 1}$.
- Final Result: The resulting monthly P&I payment is approximately $1,073.64.
Frequently Asked Questions (FAQ)
Is the calculated monthly payment my entire housing expense?
No. The calculated result is the Principal and Interest (P&I) portion only. Your total monthly payment often includes Escrow amounts for property taxes and homeowner’s insurance (PITI), and sometimes Private Mortgage Insurance (PMI).
What is amortization?
Amortization is the process of paying off debt over time in regular installments. For a mortgage, this means your monthly payment is structured so that the loan principal is fully paid down by the end of the term.
How much interest will I pay over the life of the loan?
The total interest paid is the sum of all monthly payments multiplied by the total number of payments, minus the original principal loan amount. This calculator does not display the total interest, but it is substantial.
Does making an extra payment help?
Yes. Any extra principal payment reduces the amount of interest accrued in future periods, significantly shortening the loan term and reducing the total cost of the loan.