Welcome to the simple mortgage calculator. Quickly estimate your monthly mortgage payment, including principal and interest, based on your loan amount, interest rate, and term length.
Mortgage Payment Calculator
Estimated Monthly Payment (P&I)
$0.00Mortgage Calculator Formula
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Where:
- M = Monthly Payment
- P = Principal Loan Amount
- i = Monthly Interest Rate (Annual Rate / 1200)
- n = Total Number of Payments (Loan Term in Years * 12)
Variables Explained
Understanding the variables is crucial for accurate mortgage planning:
- Loan Principal ($): The total amount borrowed from the lender. This does not include the down payment.
- Annual Interest Rate (%): The yearly cost of borrowing the principal, expressed as a percentage.
- Loan Term (Years): The duration over which you agree to repay the loan, typically 15 or 30 years.
Related Calculators
Explore other tools to support your home financing journey:
- Home Affordability Tool
- Refinance Savings Calculator
- Extra Principal Payment Impact
- Debt-to-Income Ratio Estimator
What is a Mortgage Payment Calculator?
A mortgage payment calculator is a critical financial tool that helps prospective and current homeowners estimate the size of their monthly mortgage payments. It simplifies the complex amortization process into a fast, understandable figure. By inputting the three core variables—the loan principal, the interest rate, and the loan term—the calculator instantly solves for the required payment.
The resulting monthly payment primarily covers two components: the Principal (the money you owe) and the Interest (the cost of borrowing). This P&I payment is fundamental to budgeting and determining if a specific property is financially sustainable.
How to Calculate a Monthly Payment (Example)
Let’s use an example: Principal $300,000, 6% Annual Rate, 30-Year Term.
- Find Monthly Rate (i): Divide the annual rate by 1200. $0.06 / 12 = 0.005$.
- Find Total Payments (n): Multiply the term by 12. $30 \text{ years} \times 12 = 360 \text{ payments}$.
- Apply Formula: Substitute these values into the formula to find the monthly payment $M$.
- Result: The resulting monthly P&I payment would be $1,798.65.
Frequently Asked Questions (FAQ)
The result from this calculator includes only the Principal and Interest (P&I) portion of your loan. It typically excludes property taxes, homeowner’s insurance (together often referred to as PITI), and potential HOA fees.
If you have an escrow account, your total monthly payment (PITI) can increase if property taxes or homeowner’s insurance premiums rise, even if your P&I payment remains fixed on a traditional mortgage.
The 15-year term typically features a lower interest rate and allows you to pay off your home faster, saving significant money on total interest. However, the 30-year term provides a lower monthly payment, offering greater financial flexibility.
Amortization is the process of paying off debt over time in equal installments. Early in a mortgage, a larger portion of your payment goes toward interest. Later in the term, more of the payment goes toward the principal.