Welcome to the Free Mortgage Calculator. Use this simple tool to quickly estimate your monthly mortgage payments, total interest costs, and the full repayment amount based on the loan principal, interest rate, and term. Understanding these factors is the first step toward smart homeownership.
Mortgage Calculator Free
Mortgage Payment Formula
$$M = P [ \frac{i(1 + i)^n}{(1 + i)^n – 1} ]$$ Where:
P = Principal Loan Amount
i = Monthly Interest Rate (Annual Rate / 12)
n = Total Number of Payments (Loan Term in Years * 12)
Source: Investopedia – Mortgage Payment, Bankrate – Payment Calculation Guide
Variables Explained
- Loan Amount ($): The principal amount you are borrowing from the lender, excluding any down payment.
- Annual Interest Rate (%): The yearly interest percentage charged by the lender. This is converted to a monthly rate for calculation.
- Loan Term (Years): The length of time (in years) over which the loan is scheduled to be repaid (e.g., 15, 20, or 30 years).
What is a Mortgage Calculator?
A mortgage calculator is a free, essential financial tool used to estimate the costs associated with borrowing money for a home purchase. It helps prospective and current homeowners understand the financial impact of their loan by calculating the monthly payment, including principal and interest.
Using a mortgage calculator free of charge allows individuals to model different scenarios—changing the loan amount, tweaking the interest rate, or adjusting the loan term—to see how these variables affect their cash flow. This foresight is critical for budgeting and determining an affordable price range for a property.
How to Calculate a Mortgage Payment (Example)
- Determine the Inputs: Assume a loan amount (P) of $250,000, an annual rate (R) of 5%, and a term (T) of 30 years.
- Calculate Monthly Rate (i): Divide the annual rate by 12 and 100: $i = (5 / 100) / 12 = 0.0041667$.
- Calculate Total Payments (n): Multiply the term by 12: $n = 30 \times 12 = 360$ payments.
- Apply the Formula: Substitute these values into the payment formula to find the Monthly Payment (M).
- Determine Total Repayment: Multiply the Monthly Payment by the total number of payments ($M \times n$). The result is the total amount paid back.
- Find Total Interest: Subtract the original Loan Amount (P) from the Total Repayment.
Related Calculators
- Amortization Schedule Calculator
- Home Affordability Calculator
- Refinance Savings Calculator
- Property Tax Estimator
Frequently Asked Questions (FAQ)
A higher annual interest rate significantly increases the monthly payment and the total interest paid over the life of the loan. Even a 0.5% change can result in thousands of dollars in difference.
The principal is the original amount of money borrowed. Interest is the cost charged by the lender for the use of that money. Early payments are mostly interest, while later payments are mostly principal.
Yes. Simply enter 15 into the “Loan Term (Years)” field to see how a shorter term impacts your monthly payment (usually higher) and your total interest (usually lower).
The calculator estimates P&I (Principal and Interest) only. Lender quotes often include PITI (Principal, Interest, Taxes, and Insurance), which adds to the total monthly cost.