Mortgage Calculator
Calculate your monthly mortgage payment. See how home price, down payment, interest rate, and loan term affect your payment and total cost.
A $350,000 home with 20% down at 6.5% over 30 years means a $280,000 loan, a $1,770 monthly payment, and $357,125 of interest — more than the amount borrowed.
Calculator
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How This Calculator Works
Mortgage payments use the standard amortisation formula:
M = P × r × (1+r)^n / ((1+r)^n - 1)
Where P is the loan amount (home price minus down payment), r is the monthly rate, and n is total payments.
Factors That Affect Your Mortgage
A larger down payment reduces your loan amount and monthly payment. A 20% down payment avoids Private Mortgage Insurance (PMI), which typically costs 0.5-1% of the loan annually.
Worked example
Using the defaults — a $350,000 home, $70,000 down, a 6.5% rate, over 30 years:
M = P × r(1+r)^n / ((1+r)^n − 1)
Monthly rate r = 6.5% ÷ 12 = 0.005417, n = 360 payments.
Establish the loan amount. $350,000 − $70,000 = $280,000. The down payment is exactly 20%, which is the traditional threshold for avoiding private mortgage insurance.
Compute the payment. (1.005417)^360 = 7.005. The payment is $280,000 × 0.005417 × 7.005 ÷ 6.005 = $1,770 a month.
Total the cost. $1,770 × 360 = $637,125. Interest is $637,125 − $280,000 = $357,125. You pay 128% of the principal in interest over the term.
Add what the payment does not include. Property tax, homeowners insurance and any HOA dues are collected on top, usually monthly into escrow. At a typical 1.1% property tax rate, that is roughly $3,850 a year or $320 a month more. Budget the escrow, not just the amortised payment.
Enter 350000, 70000, 6.5 and 30 above to reproduce the $1,770 payment. The model assumes a fixed rate, no extra payments, and no fees rolled into the loan.
Term and rate on the same $280,000
Shortening the term raises the payment sharply and cuts the interest bill even more sharply. Rate changes move both.
| Term | Rate | Monthly payment | Total interest | Interest as % of loan |
|---|---|---|---|---|
| 30 years (default) | 6.50% | $1,770 | $357,125 | 128% |
| 15 years | 6.50% | $2,439 | $159,038 | 57% |
| 20 years | 6.50% | $2,088 | $221,025 | 79% |
| 30 years | 5.50% | $1,590 | $292,331 | 104% |
| 30 years | 7.50% | $1,958 | $424,808 | 152% |
Switching from 30 years to 15 years raises the payment by $669 a month and removes $198,086 of interest. A one-point rate reduction on the 30-year term is worth $180 a month and $64,793 of interest.
Common mistakes with this calculation
- Shopping on the monthly payment alone. The payment is the smallest digestible number, and lenders know it. A 30-year term at $1,770 looks easier than a 15-year at $2,439, and costs $198,086 more in interest. Compare the total cost of the loan, not the instalment.
- Underestimating the escrow. Property tax, insurance and HOA dues are commonly 20% to 35% of the total monthly outlay, and they are not part of the amortisation. A $1,770 payment can easily be a $2,200 monthly obligation. Get the tax and insurance figures before you set your budget.
- Assuming a 20% down payment is only about the payment. Below 20% down, conventional lenders typically require private mortgage insurance, commonly 0.5% to 1% of the loan annually. On $280,000 that is $1,400 to $2,800 a year, or $117 to $233 a month, until you build enough equity to have it removed.
- Ignoring the total interest when rates fall. Refinancing to a lower payment is not automatically cheaper. Restarting the clock from 30 years puts you back at the beginning of the amortisation curve, where nearly every payment is interest. Always compare total cost across the two paths, not the payment.
When this calculator does not apply
- It assumes a fixed rate for the full term. Adjustable-rate mortgages reset, and the model cannot represent that.
- It excludes escrow: property tax, homeowners insurance, PMI and HOA dues are all collected on top of the amortised payment.
- It assumes no extra payments, no fees rolled into the principal, and no prepayment penalty.
- It does not model any tax deduction for mortgage interest, which changes the after-tax cost for itemising filers.
- It excludes closing costs, which are typically 2% to 5% of the loan amount and are paid separately at origination.
Frequently Asked Questions
How much down payment do I need?
Most conventional loans require 3-5% minimum, but 20% eliminates PMI. FHA loans require 3.5%. VA and USDA loans may require 0% down.
What is PMI?
Private Mortgage Insurance protects the lender if you default. It is typically required when your down payment is less than 20% and costs 0.5-1% of the loan amount annually.
Sources & Methodology
This calculator uses standard financial formulas. See our methodology page for the full formula derivation.
- Owning a Home — Loan Options Consumer Financial Protection Bureau
- What Is Private Mortgage Insurance? Consumer Financial Protection Bureau
- Mortgage Interest Deduction Internal Revenue Service
- Consumer Handbook on Adjustable-Rate Mortgages Consumer Financial Protection Bureau
- Housing Finance Data Federal Reserve
Last reviewed .
Key takeaways
- $350,000 with 20% down at 6.5% over 30 years is a $280,000 loan and a $1,770 monthly payment.
- Total interest over the term is $357,125 — 128% of the amount borrowed.
- A 15-year term costs $669 more a month and saves $198,086 in interest.
- Escrow for tax and insurance typically adds 20% to 35% to the real monthly outlay.
- Below 20% down, PMI commonly adds $117 to $233 a month on a loan this size.