How to Use This Calculator
- 1
Enter the home price
Type the full purchase price of the home, not just the amount you plan to borrow. The calculator subtracts your down payment automatically.
- 2
Add your down payment
Enter the cash you'll put down at closing. Putting 20% or more down usually lets you skip private mortgage insurance (PMI) and lowers your monthly payment.
- 3
Set the interest rate and term
Use the rate from your lender quote or current market averages. Most U.S. buyers choose a 30-year fixed loan; a 15-year term raises the payment but cuts total interest dramatically.
- 4
Add taxes and insurance (optional)
If you know your annual property tax bill and homeowners insurance premium, enter them to see a more realistic all-in monthly payment.
- 5
Review the breakdown
Your estimated payment updates instantly. Check the principal-versus-interest split and the total cost of the loan before you commit.
How It Works
This calculator uses the standard fixed-rate mortgage amortization formula that virtually every U.S. lender uses to compute a monthly payment:
where M is the monthly principal-and-interest payment, P is the loan amount (home price minus down payment), r is the monthly interest rate (the annual rate divided by 12), and n is the total number of monthly payments (years × 12). If your rate is 0%, the payment is simply the loan amount divided by the number of months. Property taxes and insurance are divided by 12 and added on top.
Worked example
Say you borrow $300,000 at 6.5% for 30 years. The monthly rate is 0.065 ÷ 12 = 0.005417, and n = 360 payments.
M = 300,000 × [0.005417 × (1.005417)360] ÷ [(1.005417)360 − 1] ≈ $1,896.20 per month.
Over 30 years you would pay about $682,633 in total — roughly $382,633 of it in interest, more than the original loan itself. That's why even a small rate difference matters so much.
Frequently Asked Questions
How much house can I afford on my salary?
A common rule of thumb is the 28/36 rule: spend no more than 28% of your gross monthly income on housing costs and no more than 36% on total debt payments. For example, with a $90,000 salary ($7,500/month gross), that caps your housing payment around $2,100 per month. Work backwards from that number using this calculator to find a comfortable price range.
Does this calculator include PMI?
No. Private mortgage insurance typically applies when your down payment is under 20% and usually costs 0.3%–1.5% of the loan amount per year. If you expect to pay PMI, you can approximate it by adding the annual cost to the insurance field.
What's the difference between a 15-year and a 30-year mortgage?
A 30-year loan has lower monthly payments but costs far more in total interest. A 15-year loan roughly doubles the principal portion of each payment and usually comes with a lower rate, so you build equity much faster. On a $300,000 loan at 6.5%, switching from 30 to 15 years raises the payment from about $1,896 to about $2,613 but saves over $212,000 in interest.
How does the down payment affect my monthly payment?
Every dollar of down payment is a dollar you don't borrow, so a larger down payment lowers both your monthly payment and total interest. Putting 20% down on a $350,000 home instead of 10% reduces the loan by $35,000 — cutting the payment by roughly $221 per month at 6.5% over 30 years — and typically eliminates PMI.
Are property taxes and homeowners insurance included in my mortgage payment?
Often yes. Most lenders collect them through an escrow account: they add one-twelfth of your estimated annual tax and insurance bills to each payment, then pay those bills on your behalf. Enter your annual amounts in the optional fields to model this.
Should I pay points to lower my interest rate?
One discount point costs 1% of the loan amount and typically lowers your rate by about 0.25%. Points make sense if you'll keep the loan long enough for the monthly savings to exceed the upfront cost — usually five years or more. Run the numbers here with and without the reduced rate to compare.
Why is my actual lender quote different from this estimate?
Lenders add costs this simplified calculator doesn't model, such as PMI, HOA dues, mortgage insurance premiums on FHA loans, and closing costs rolled into the balance. Your credit score, debt-to-income ratio, and local tax rates also shift the final numbers. Treat this estimate as a planning tool, not a loan offer.