Mortgage Calculator
Calculate your monthly mortgage payment (PITI: principal, interest, taxes, insurance), total interest over the loan term, and full amortization schedule. Includes PMI estimation for down payments below 20%.
Not Financial Advice: This calculator provides estimates for educational purposes only. Actual mortgage terms, rates, fees, and requirements vary by lender, credit score, loan type (conventional, FHA, VA, jumbo), and market conditions. Consult a licensed mortgage professional (NMLS-registered) before making real estate financing decisions.
Monthly Payment (PITI)
$2,628.97
principal, interest, tax, ins
Loan Amount
$320,000
$80,000 down (20%)
Total Interest Paid
$446,428
over 30 years
Total Cost of Home
$1,026,428
incl. tax & insurance
Monthly Payment Breakdown
| Month | Principal | Interest | Remaining Balance |
|---|---|---|---|
| Month 1 | $262.30 | $1,866.67 | $319,738 |
| Month 2 | $263.83 | $1,865.14 | $319,474 |
| Month 3 | $265.37 | $1,863.60 | $319,208 |
| Month 4 | $266.92 | $1,862.05 | $318,942 |
| Month 5 | $268.48 | $1,860.49 | $318,673 |
| Month 6 | $270.04 | $1,858.93 | $318,403 |
| Month 7 | $271.62 | $1,857.35 | $318,131 |
| Month 8 | $273.20 | $1,855.77 | $317,858 |
| Month 9 | $274.79 | $1,854.17 | $317,583 |
| Month 10 | $276.40 | $1,852.57 | $317,307 |
| Month 11 | $278.01 | $1,850.96 | $317,029 |
| Month 12 | $279.63 | $1,849.34 | $316,749 |
| Month 13 | $281.26 | $1,847.70 | $316,468 |
| Month 14 | $282.90 | $1,846.06 | $316,185 |
| Month 15 | $284.55 | $1,844.41 | $315,901 |
| Month 16 | $286.21 | $1,842.75 | $315,614 |
| Month 17 | $287.88 | $1,841.08 | $315,327 |
| Month 18 | $289.56 | $1,839.41 | $315,037 |
| Month 19 | $291.25 | $1,837.72 | $314,746 |
| Month 20 | $292.95 | $1,836.02 | $314,453 |
| Month 21 | $294.66 | $1,834.31 | $314,158 |
| Month 22 | $296.38 | $1,832.59 | $313,862 |
| Month 23 | $298.11 | $1,830.86 | $313,564 |
| Month 24 | $299.85 | $1,829.12 | $313,264 |
| Month 36 | $321.52 | $1,807.45 | $309,526 |
| Month 48 | $344.77 | $1,784.20 | $305,519 |
| Month 60 | $369.69 | $1,759.28 | $301,221 |
| Month 72 | $396.41 | $1,732.55 | $296,613 |
| Month 84 | $425.07 | $1,703.90 | $291,672 |
| Month 96 | $455.80 | $1,673.17 | $286,373 |
| Month 108 | $488.75 | $1,640.22 | $280,692 |
| Month 120 | $524.08 | $1,604.89 | $274,600 |
| Month 132 | $561.97 | $1,567.00 | $268,067 |
| Month 144 | $602.59 | $1,526.38 | $261,062 |
| Month 156 | $646.15 | $1,482.82 | $253,551 |
| Month 168 | $692.86 | $1,436.11 | $245,497 |
This calculator provides estimates only. Actual mortgage payments may vary based on lender fees, escrow requirements, PMI rates, HOA fees, and other costs. Consult a licensed mortgage professional before making real estate financing decisions.
Understanding Mortgage Costs
A mortgage is a secured loan used to purchase real estate. The property serves as collateral — if you default on payments, the lender can foreclose and sell the property. Mortgage payments are typically structured as PITI: Principal (repaying the loan balance), Interest (the lender's cost of lending), Taxes (property taxes collected in escrow), and Insurance (homeowner's insurance and potentially PMI).
Private Mortgage Insurance (PMI)is required when your down payment is less than 20% of the home's value. PMI protects the lender (not you) in case of default. It typically costs 0.5–1.5% of the loan amount annually. Once your equity reaches 20%, you can request PMI cancellation under the Homeowners Protection Act.
The amortization schedule reveals an important reality: in the early years of a mortgage, the vast majority of your payment goes to interest rather than principal. On a 30-year mortgage at 7%, approximately 85% of your first monthly payment is interest. By year 15, the split is roughly equal. This is why extra principal payments in the early years have an outsized impact on total interest paid.
A 15-year mortgage carries higher monthly payments but dramatically less total interest — typically 50–60% less — compared to a 30-year loan at the same rate. The optimal term depends on your cash flow flexibility and opportunity cost of capital (what else you could do with the extra monthly payment difference).
| Loan Amount | Rate | 15-Year Payment | 30-Year Payment | Total Interest (30yr) |
|---|---|---|---|---|
| $200,000 | 6.5% | $1,742 | $1,264 | $255,040 |
| $300,000 | 7.0% | $2,696 | $1,996 | $418,560 |
| $400,000 | 7.0% | $3,595 | $2,661 | $558,080 |
| $500,000 | 7.5% | $4,644 | $3,496 | $758,560 |
| $600,000 | 7.5% | $5,572 | $4,195 | $910,200 |
The Complete Guide to Mortgage Types
Choosing the right mortgage product is as important as negotiating the interest rate. The US mortgage market offers several primary loan structures, each with distinct risk/benefit profiles that suit different borrower circumstances.
30-Year Fixed Rate Mortgage
The most popular mortgage in the US. Provides payment certainty for three decades, making household budgeting straightforward. The tradeoff is a higher interest rate (typically 0.5-0.75% above 15-year rates) and significantly more total interest paid. Best for: buyers who prioritize payment stability, are stretching to afford the home, or plan to live there long-term.
15-Year Fixed Rate Mortgage
Higher monthly payments but typically 50-60% less total interest over the loan life. Builds equity roughly twice as fast. Rates are lower (often 0.5-0.75% below 30-year rates). Best for: buyers with strong cash flow who want to minimize total interest cost and accelerate equity building.
Adjustable-Rate Mortgage (ARM)
Fixed rate for an initial period (5, 7, or 10 years), then adjusts annually based on a benchmark rate (typically SOFR or CMT) plus a margin. Initial rates are lower than fixed mortgages. Risk: if rates rise before or during the adjustable period, your payment can increase significantly. Best for: buyers confident they will sell or refinance before the rate adjusts.
FHA Loan
Backed by the Federal Housing Administration. Allows down payments as low as 3.5% with credit scores above 580. Requires mortgage insurance premium (MIP) for the life of the loan (if down payment < 10%). Best for: first-time buyers or those with limited savings but stable income.
VA Loan
Available to eligible US military veterans, active-duty service members, and surviving spouses. No down payment required, no PMI, competitive rates. The VA funding fee (1.25-3.3% of loan amount) replaces PMI. Best for: eligible veterans — typically the most favorable mortgage product available to them.
Jumbo Loan
Loans above the conforming loan limit ($766,550 in most US markets for 2024). Not eligible for Fannie Mae/Freddie Mac purchase, requiring stricter qualification standards. Typically requires 20% down, higher credit score (720+), and lower debt-to-income ratios. Rates may be higher or lower than conforming loans depending on market conditions.
Extra Payments: The Math Behind Mortgage Acceleration
Making extra principal payments can dramatically reduce the total cost of a mortgage. On a $300,000, 30-year mortgage at 7%, adding just $200/month in extra principal payments reduces the loan term by approximately 6 years and saves over $89,000 in total interest. Adding $500/month extra saves approximately 11 years and over $165,000. The key insight is that extra payments made in the early years of the mortgage are most effective, because they prevent interest from compounding on the reduced principal for the remaining loan term.
The bi-weekly payment strategy — making half of your monthly payment every two weeks instead of one full payment monthly — results in 26 half-payments (13 full payments) per year instead of 12. This one extra annual payment reduces a 30-year mortgage term by approximately 4-5 years without requiring a large lump sum.
Refinancing: When Does It Make Sense?
Refinancing replaces your existing mortgage with a new one, typically at a lower interest rate. The break-even calculationdetermines whether refinancing makes financial sense: divide the total closing costs by the monthly savings. If closing costs are $6,000 and monthly savings are $200, the break-even point is 30 months. If you plan to stay in the home for at least that long, refinancing is financially beneficial. The traditional "2% rule" (refinance only if you can drop the rate by 2%) is outdated — a 0.5% rate reduction on a large mortgage can be well worth the refinancing costs if you have significant remaining loan term.
Pay Down Mortgage vs Invest: The Framework
One of the most debated personal finance questions is whether to make extra mortgage payments or invest the money instead. The mathematical answer depends on your mortgage interest rate versus expected investment returns. If your mortgage rate is 4% and you expect 8% returns from investing, investing the extra money has a higher mathematical expected value. If your mortgage rate is 7% and you expect 7% from investing, the decision is closer to neutral (but the mortgage paydown is risk-free, while investment returns are uncertain). Behavioral economics and risk tolerance also matter: many people sleep better knowing their home is paid off faster, even if the math slightly favors investing.
The 28/36 Rule: Qualifying Guidelines
Lenders traditionally use the 28/36 rule to assess mortgage affordability. Your monthly housing costs (PITI + HOA fees) should not exceed 28% of gross monthly income. Your total monthly debt obligations (housing + car payments + student loans + credit cards) should not exceed 36% of gross income. Some lenders permit higher ratios (up to 43% back-end) for borrowers with strong compensating factors (large down payment, excellent credit, substantial reserves). Using our mortgage calculator to keep PITI at or below 28% of your gross income is a sound starting point for affordability planning.
Understanding Mortgage Amortization: Where Your Payment Goes
Every mortgage payment is split between interest and principal. In the early years of a mortgage, the vast majority of your payment goes to interest rather than reducing your loan balance. On a $350,000 mortgage at 7% for 30 years, your monthly payment is approximately $2,329. In the very first payment: roughly $2,042 goes to interest and only $288 reduces your principal. By year 15, the split is approximately $1,601 interest and $728 principal. By year 29, it is $239 interest and $2,090 principal. Understanding this front-loaded interest structure explains why the total interest on a 30-year mortgage can exceed the original loan principal for rates above 5%, and why extra early payments have such an outsized impact on total loan cost.
The complete amortization schedule — showing how much of each payment goes to interest vs. principal, and the remaining balance after each payment — is the most useful diagnostic tool for understanding the true cost of your mortgage. This calculator provides a year-by-year summary. For month-by-month granularity, multiply the monthly payment into the same formula applied to each period's remaining balance.
Private Mortgage Insurance (PMI) and How to Avoid It
If your down payment is less than 20% of the home purchase price, most conventional lenders require Private Mortgage Insurance (PMI). PMI protects the lender (not you) against default. PMI typically costs 0.5–1.5% of the loan amount per year, added to your monthly payment. On a $350,000 loan, PMI of 1% adds $292/month to your payment — a significant cost that produces no equity or other benefit to the borrower.
Strategies to avoid or eliminate PMI: (1) Make a 20% or larger down payment at purchase. (2) Use a piggyback loan structure (80/10/10 or 80/15/5) — a first mortgage for 80%, a second mortgage for 10–15%, and a 10–5% down payment, eliminating PMI while avoiding mortgage insurance at the cost of a higher second-mortgage rate. (3) Request PMI cancellation once your loan-to-value ratio reaches 80% based on your original amortization schedule (the Homeowners Protection Act requires automatic cancellation at 78% LTV). (4) Refinance once your equity exceeds 20%. For FHA loans with less than 10% down, the MIP (mortgage insurance premium) remains for the life of the loan, making conventional loans with PMI — which can be cancelled — often preferable once your credit score is sufficient.
The True Cost of Homeownership Beyond the Mortgage Payment
The mortgage payment is only one component of the total cost of homeownership. A comprehensive budget for owning a home should include: property taxes (typically 0.5–2.5% of home value per year, varying dramatically by location — from 0.28% in Hawaii to 2.49% in New Jersey), homeowners insurance (typically $1,200–$3,500/year depending on location and coverage), HOA fees (ranging from zero to $1,000+/month for condo buildings or planned communities), maintenance and repairs (a reliable rule of thumb: budget 1–2% of home value annually — more for older homes), utilities (which may be higher than renting given larger square footage), and the opportunity cost of the down payment (capital locked in home equity rather than invested in a diversified portfolio).
When computing the true all-in cost of ownership and comparing it to renting, many buyers find that homeownership costs 30–50% more per month than the mortgage payment alone. This does not mean homeownership is financially inferior to renting — home appreciation can offset these costs substantially over time, and there are non-financial benefits (stability, customization, community) that carry real value. But understanding the complete cost picture prevents the common mistake of purchasing more home than can be comfortably afforded based on the mortgage payment alone.
Mortgage Points and Rate Buydowns
Discount points (or mortgage points) allow borrowers to pay an upfront fee to permanently reduce the interest rate on their mortgage. One point equals 1% of the loan amount and typically reduces the rate by 0.25% (this ratio varies by lender and market conditions). On a $400,000 mortgage, one point costs $4,000 and might reduce the rate from 7.5% to 7.25%, saving approximately $67/month. The break-even: $4,000 ÷ $67 = approximately 60 months (5 years). If you stay in the home beyond 5 years, buying the point was financially beneficial. Points purchased at closing are tax-deductible in the year of purchase for primary residences (consult a tax professional for current rules).
Temporary rate buydowns (such as the 2-1 buydown program) are seller-paid incentives increasingly common in slower markets. A 2-1 buydown reduces the rate by 2% in year one and 1% in year two, then returns to the note rate in year three. This is not a permanent rate reduction — the escrow account holding the buydown funds is exhausted after two years, and your payment increases to the full note rate. Ensure your budget can support the full rate at year 3 before accepting this incentive. This calculator can model multiple rate scenarios to stress-test payment affordability at the full note rate.
Refinancing: When It Makes Sense to Replace Your Mortgage
Mortgage refinancing — replacing your existing mortgage with a new one, ideally at a lower rate or more favorable terms — can save tens of thousands of dollars over the life of a loan when done at the right time. The traditional rule of thumb was to refinance when rates drop at least 1–2 percentage points below your current rate, but this oversimplifies the analysis. The correct framework is the break-even analysis: divide the total closing costs of the refinance (typically 2–5% of the loan amount) by your monthly savings to determine how many months until you break even. If you plan to stay in the home beyond the break-even date, refinancing is financially beneficial.
Rate-and-term refinancing (changing the rate or loan term without taking cash out) is the most straightforward type. Cash-out refinancing allows homeowners to borrow more than the existing mortgage balance and receive the difference in cash — useful for home improvements that add value or for debt consolidation, but it resets the amortization clock and increases total interest paid. A 15-year refinance from a 30-year mortgage can save massive amounts in total interest — though monthly payments increase substantially. Use this calculator to model the 15-year scenario by entering the remaining balance as principal, a shorter term, and a potentially lower rate.
The ideal refinancing window is when: (1) current market rates are meaningfully below your note rate, (2) your credit score has improved since origination (potentially qualifying you for better terms), (3) you have enough home equity (typically at least 20%) to avoid PMI and qualify for best rates, and (4) you have sufficient time remaining in the home to recover closing costs. A rate environment that is declining or expected to decline (like the post-2022 cycle when rates peak and eventually return lower) creates refinancing opportunities for millions of homeowners who took loans at peak rates.
One often-overlooked refinancing decision is whether to roll closing costs into the loan (no-cost refinance) versus paying them upfront. No-cost refinances result in a slightly higher rate — the lender covers closing costs through a higher margin. For homeowners uncertain about how long they will stay in the property, a no-cost refinance at a marginally higher rate may be superior to paying $8,000–$15,000 in closing costs only to move 2–3 years later. This calculator can model both scenarios to compare total interest paid across different time horizons, helping you determine which structure is financially optimal for your specific situation.