Mortgage Calculator

How this mortgage calculator works

Monthly mortgage payment is the sum of principal + interest (from the loan), plus typical escrow items like property tax and homeowners insurance. The calculator uses the standard amortization formula to compute principal & interest.

Payment formula (principal & interest)

P = (r · L) / (1 − (1 + r)−n)

• L = loan amount (price − down payment)
• r = monthly interest rate (APR ÷ 12)
• n = total number of payments (years × 12)

What each input means

• Home Price: the purchase price of the property.
• Down Payment %: cash you pay upfront; increases equity and lowers the loan.
• APR %: annual percentage rate (interest + lender costs), used to compute monthly rate.
• Term (years): length of the loan (e.g., 30 years = 360 payments).
• Property Tax / yr: yearly taxes; the calculator spreads this into a monthly amount.
• Insurance / yr: homeowners policy estimate; also spread monthly.

Notes & practical tips

• PMI (private mortgage insurance) may apply when down payment < 20%. It typically adds $30–$70 per $100k borrowed and ends once you reach ~20% equity.
• Amortization: early payments are mostly interest; principal payoff accelerates later.
• APR vs Rate: APR includes some lender fees; the nominal rate drives the monthly P&I math.
• Extra payments toward principal reduce interest over the life of the loan and shorten the term.

Example

Price $400,000 with 20% down → Loan $320,000. APR 6.5% (monthly r ≈ 0.065/12). Term 30 years (n = 360). Plugging into the formula gives monthly principal & interest. Add monthly tax (tax/12) and insurance (insurance/12) for the Total Monthly.

Common questions

• Does this include HOA? No add HOA dues to the total if your property has them.
• Fixed vs ARM? This tool assumes a fixed-rate mortgage. ARMs change rate after an intro period.
• Closing costs? Not included. Typical range is ~2–5% of purchase price, due at closing.

This calculator is for education only and may differ from lender quotes. Verify details with your lender.