Mortgage Calculator
Calculate monthly payments, total interest and full amortization schedule.
Loan Details
20.0% of home price
Monthly Payment
$1,517
Loan Amount
$240,000
Total Interest
$306,107
Total Cost
$546,107
- Balance
- Interest
What is a Mortgage Calculator?
A mortgage calculator helps you estimate your monthly home loan payment based on the home price, down payment, interest rate, and loan term. It also shows you the total cost of the loan over its lifetime — including how much of every payment goes toward interest versus paying down the principal.
For most people, a mortgage is the largest financial commitment of their lives. A $300,000 home financed over 30 years at 6.5% will cost over $382,000 in interest alone — more than the home itself. Understanding these numbers before signing is not just useful, it is essential.
This calculator shows the full amortization schedule year by year, a pie chart breakdown of your total cost, and live updates as you adjust any input.
How Mortgage Payments Work
Every mortgage payment splits between interest and principal. In early years, most goes to interest because it is calculated on the full outstanding balance. As you pay down the balance, more of each payment shifts toward principal — even though the monthly amount never changes.
$300,000 mortgage at 6.5% over 30 years — how payments shift:
| Year | Monthly Payment | → Principal | → Interest |
|---|---|---|---|
| Year 1 | $1,896 | $512 | $1,384 |
| Year 5 | $1,896 | $662 | $1,234 |
| Year 10 | $1,896 | $907 | $989 |
| Year 20 | $1,896 | $1,388 | $508 |
| Year 30 | $1,896 | $1,884 | $12 |
In Year 1, only 27% of your payment builds equity. By Year 30, over 99% does. This is why prepaying in early years saves dramatically more than prepaying later.
Down Payment — Why 20% Matters
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Smaller Loan
More down payment = smaller loan = lower monthly payment and less total interest.
🛡️
Avoid PMI
Below 20%, most lenders require Private Mortgage Insurance (PMI) — adding 0.5–1.5% of loan annually to your costs.
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Better Rate
Higher down payment often qualifies you for a lower interest rate since you represent less risk to the lender.
Fixed vs Adjustable Rate Mortgages
Fixed Rate Mortgage
Rate stays the same for the entire term. Payment never changes.
✓ Payment stability — predictable budgeting
✓ Best when current rates are low
✗ Higher initial rate than ARM
Adjustable Rate (ARM)
Fixed for initial period (5–7 years), then adjusts annually with market.
✓ Lower initial rate — smaller early payments
✓ Good if selling within initial period
✗ Payment uncertainty after initial period
Frequently Asked Questions
❓ How much mortgage can I afford?
Standard rule: total housing costs should not exceed 28% of gross monthly income. Total debt payments (mortgage + car + student loans + cards) should stay under 36–43%. This debt-to-income ratio (DTI) is what lenders use to qualify you.
❓ Should I choose a 15-year or 30-year mortgage?
A 15-year has a higher monthly payment (30–40% more) but roughly half the total interest. On a $300,000 loan at 6.5%, the 30-year costs $382,000 in interest; the 15-year costs around $150,000. If you can comfortably afford it, 15 years is the superior financial choice.
❓ Does paying extra principal reduce interest?
Yes — dramatically. On a 30-year $300,000 mortgage at 6.5%, paying an extra $200/month cuts about 6 years off the loan and saves over $80,000 in interest. Every extra dollar eliminates future compounding interest on that amount.
❓ What is PMI and when can I remove it?
Private Mortgage Insurance protects the lender if you default. It is required when down payment is under 20% and typically costs 0.5–1.5% of the loan per year. Once you reach 20% equity (either through payments or appreciation), you can request PMI removal. It is automatically cancelled at 22% equity in the US under the Homeowners Protection Act.
❓ When should I refinance my mortgage?
Refinancing makes sense when you can reduce your rate by 1%+, plan to stay long enough to recoup closing costs ($2,000–5,000), and have sufficient equity. Break-even is typically 2–4 years. Compare your current vs new payment and multiply savings by months remaining to estimate total benefit.