Mortgage CalculatorMonthly payment, amortisation & affordability — instantly.
Enter your home price, down payment, interest rate, and loan term to see your monthly payment, total interest, and full amortisation schedule. Includes PMI, taxes, and extra payment scenarios.
= $80,000 · LTV 80%
30yr avg 6.99% · 15yr avg 6.39%
Enter your details and hit Calculate
Estimates only — not financial or legal advice. Monthly payments are projections based on the inputs you provide. Actual costs will vary based on lender terms, credit score, and local taxes.
$2,200+
typical monthly payment on a $350k home at 7% (30yr)
$180k+
total interest paid on a 30-year $320k mortgage at 7%
5 years
earlier payoff by adding $200/month to a 30-year loan
Next steps
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Your estimate is a strong starting point. Here's how to turn it into a real approval.
- 📊Compare live rates from multiple lenders side-by-side
- ✅Pre-qualify in minutes — no hard credit pull required
- 💰See closing cost estimates before you commit
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How does a mortgage calculator work?
A mortgage calculator uses the standard annuity formula to determine your monthly principal and interest payment. The key variables are your loan amount (home price minus down payment), your annual interest rate, and your loan term in years. From these three inputs, the formula produces a fixed monthly payment that — if paid consistently — will reduce your balance to exactly zero on the final payment.
This calculator goes further than a basic payment estimator. It adds property tax, homeowner's insurance, PMI (if your down payment is below 20%), and HOA fees to show your true total monthly housing cost. It also simulates extra payments — monthly, yearly, and one-time lump sums — so you can see exactly how much interest you'd save and how many years you'd cut from your loan.
How is a monthly mortgage payment calculated?
The monthly principal and interest (P&I) payment is calculated using the standard loan amortisation formula:
Where: M = monthly payment, P = principal (loan amount), r = monthly interest rate (annual rate ÷ 12 ÷ 100), n = total number of payments (years × 12).
For example: a $320,000 loan at 7% for 30 years produces a monthly P&I payment of approximately $2,129. Over the life of the loan you'd pay $446,440 total — meaning $126,440 in interest on top of the $320,000 you borrowed.
What factors affect how much mortgage you can afford?
Lenders evaluate affordability through your debt-to-income (DTI) ratio. Two thresholds matter:
- Front-end DTI (28%):Your monthly housing costs (P&I + tax + insurance + PMI) should not exceed 28% of your gross monthly income.
- Back-end DTI (36–43%):All monthly debt payments combined (housing + car loans + student loans + credit cards) should not exceed 36–43% of gross monthly income.
Other factors include your credit score (higher scores unlock better rates), the size of your down payment (20% avoids PMI), your employment history, and your cash reserves after closing. Use the “Check affordability” section in the calculator above to see your personal DTI based on your income and existing debt.
How to reduce the total interest on your mortgage
The most effective strategies for reducing your lifetime interest cost:
Make extra principal payments
Even $100–$200/month extra applied to principal has a compounding effect. On a $320k loan at 7%, an extra $200/month saves over $60,000 in interest and pays off the loan 6 years early.
Make one extra payment per year
Splitting your monthly payment in half and paying every two weeks results in 26 half-payments (13 full payments) per year instead of 12 — effectively one extra payment annually, saving years off a 30-year loan.
Refinance when rates drop
If market rates fall 1–1.5% below your current rate, refinancing can reduce your monthly payment and total interest significantly. Use a break-even analysis to confirm the closing costs are worth the savings.
Choose a shorter term
A 15-year mortgage carries a lower interest rate (typically 0.5–0.75% less than a 30-year) and pays off the balance twice as fast. On a $320k loan, the 15-year total interest cost is roughly 60% less than a 30-year — but monthly payments are higher.
Understanding mortgage amortisation
Amortisation describes how loan payments are split between interest and principal over time. In the first month of a $320,000 mortgage at 7%, your $2,129 payment is split roughly $1,867 interest and $262 principal. In month 60 (year 5), it's approximately $1,823 interest and $306 principal. By month 300 (year 25), the split has reversed — you're paying mostly principal with relatively little interest.
This is why refinancing or selling in the first 7–10 years means you've paid mostly interest with very little equity built through payments (though appreciation builds equity separately). The amortisation schedule in the “Schedule” tab above shows every monthly split for your specific loan.
PMI: what it is and when you can remove it
Private Mortgage Insurance (PMI) is required on conventional loans when your down payment is less than 20%. It protects the lender against default risk. PMI typically costs 0.5–1.5% of the loan balance annually — on a $300,000 loan that's $1,500–$4,500 per year ($125–$375/month). PMI can be removed once your loan-to-value ratio (LTV) falls below 80%, either through regular payments reducing your balance, or through appreciation increasing your home's value. Under the Homeowners Protection Act, lenders must automatically cancel PMI when your LTV reaches 78%.
Frequently asked questions
How much mortgage can I afford?▼
Most lenders use the 28/36 rule: your monthly housing costs (principal, interest, taxes, insurance) should not exceed 28% of your gross monthly income, and your total monthly debt should not exceed 36–43%. For a $90,000 annual income that means a max housing payment of roughly $2,100/month, which typically qualifies for a $300,000–$380,000 mortgage at current rates with a 20% down payment.
What is a good mortgage interest rate right now?▼
As of 2025, the national average for a 30-year fixed mortgage is approximately 6.5–7.5%. A rate below 6.5% is considered competitive for borrowers with strong credit (740+). A 15-year fixed typically runs 0.5–0.75% lower than the 30-year. Rates change daily — always check current lender quotes rather than relying on averages.
Should I make extra mortgage payments each month?▼
Extra payments go directly to principal, which reduces the balance on which interest accrues. On a $320,000 loan at 7%, paying an extra $200/month saves roughly $47,000 in interest and pays off the loan 5 years early. The maths strongly favours extra payments, but weigh this against paying down higher-rate debt first (credit cards, personal loans) and building an emergency fund.
How does PMI (Private Mortgage Insurance) work?▼
PMI is required by most conventional lenders when your down payment is less than 20% (i.e., your loan-to-value ratio exceeds 80%). It protects the lender — not you — against default. PMI typically costs 0.5–1.5% of the loan annually, added to your monthly payment. Once your equity reaches 20% through payments or appreciation, you can request PMI cancellation. FHA loans have their own mortgage insurance premium (MIP) that may last the life of the loan.
Fixed-rate vs. adjustable-rate mortgage — which is better?▼
A fixed-rate mortgage (30-year or 15-year) locks your interest rate for the life of the loan — your payment never changes. An ARM (adjustable-rate mortgage) starts with a lower rate for a fixed period (typically 5 or 7 years) then adjusts annually. ARMs suit buyers who plan to sell or refinance before the adjustment period. Fixed-rate mortgages are better for long-term homeowners in a rising-rate environment because they protect against payment increases.
What is amortisation and why does it matter?▼
Amortisation is the process of paying off a loan through regular scheduled payments. In the early years of a mortgage, the vast majority of each payment goes toward interest rather than principal — on a 30-year $320,000 mortgage at 7%, your first payment is roughly $1,960 in interest and only $170 in principal. This ratio gradually shifts over time. Understanding amortisation explains why extra early payments have such a dramatic effect on total interest paid.
How much is the down payment on a house?▼
A conventional mortgage typically requires 5–20% down. A 20% down payment eliminates PMI and results in lower monthly payments. FHA loans allow as little as 3.5% down for buyers with a 580+ credit score. VA loans and USDA loans offer 0% down for eligible buyers. On a $400,000 home, a 20% down payment is $80,000. Many first-time buyer programs offer down payment assistance — check your state's housing finance agency.
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