What Is a Mortgage Calculator?
A mortgage calculator estimates your monthly home loan payment based on the purchase price, down payment, interest rate, and loan term. It helps prospective homebuyers understand affordability and compare different financing options before committing to a mortgage.
How to Use This Mortgage Calculator
- Enter the home price and your planned down payment amount or percentage.
- Input the mortgage interest rate and select the loan term (typically 15 or 30 years).
- Click “Calculate” to see your estimated monthly payment, total interest, and overall cost of the home.
Key Concepts
A mortgage is a secured loan backed by the property itself. The loan-to-value (LTV) ratio—calculated as the loan amount divided by the property value—determines whether private mortgage insurance (PMI) is required, typically when LTV exceeds 80%. Fixed-rate mortgages keep the same interest rate throughout the term, while adjustable-rate mortgages (ARMs) can change after an initial period. A larger down payment reduces both the monthly payment and total interest.
M = P × [r(1+r)n] ÷ [(1+r)n − 1]
(P = Principal, r = Monthly Rate, n = Number of Months)
Frequently Asked Questions
How much should I put down on a house?
A 20% down payment avoids PMI and lowers your monthly payment. However, many programs accept 3–5% down, making homeownership more accessible at the cost of higher monthly payments and insurance premiums.
Is a 15-year or 30-year mortgage better?
A 15-year mortgage offers lower interest rates and far less total interest but higher monthly payments. A 30-year mortgage provides lower monthly payments but costs substantially more in interest over the life of the loan.
What is included in a mortgage payment?
A full mortgage payment often includes principal, interest, property taxes, and homeowners insurance—commonly abbreviated as PITI. This calculator focuses on the principal and interest portion.