Mortgage calculator
Most mortgage calculators stop at principal and interest, which is why their figure never matches the real bill. This one also adds property tax and home insurance, so the monthly payment you see is much closer to what will actually leave your account.
Uses a standard published formula, explained below. Everything is calculated in your browser, and nothing you enter is sent to a server. This is not financial advice.
The property and loan
Total monthly payment
—
Down payment
—
Amount borrowed
—
Total interest
—
True cost of the home
—
Show the working
The amortization formula, with your figures substituted in:
—
How to use this calculator
- Home price: the agreed purchase price, before closing costs.
- Down payment: enter it as a percentage or as an amount, using the dropdown. The results always show the percentage, because lenders base their pricing on it.
- Interest rate: the annual rate the lender quotes you.
- Loan term: how long you have to repay the loan. Fifteen and thirty years are the most common choices, and the difference in total cost between them is bigger than most people expect.
- Property tax and home insurance: enter each one per year or per month, using the dropdowns. Both are added to the monthly payment. Leave them blank if you only want principal and interest.
Why the real payment is higher than a basic loan calculator shows
Principal and interest are only part of a mortgage payment. Depending on where you live, the monthly bill can also include property tax, home insurance, mortgage insurance if your down payment was small, and sometimes homeowners association fees.
Lenders often collect tax and insurance every month into an escrow account and pay the bills for you, which is why they appear on the mortgage statement instead of arriving separately. On a typical mid-priced home they can add a fifth or more to the payment. A calculator that leaves them out gives a figure that is mathematically correct but no use for budgeting.
Why a 20% down payment matters
Twenty percent is not an arbitrary number. In many countries, it is the point below which lenders require mortgage insurance. This is an extra monthly premium that protects the lender, not you, and you pay it in exchange for borrowing more.
That makes the last few percent before 20% unusually valuable. Going from 15% down to 20% down only reduces the loan slightly, but it can remove the insurance premium altogether. The saving on those extra funds is therefore much larger than the interest rate alone suggests. If you are close to 20%, it is usually worth reaching it.
A 15-year or a 30-year mortgage
A shorter term has a higher monthly payment but a much lower total cost. On a loan of 240,000 at 6.5%, a 30-year term costs about 306,000 in interest, while a 15-year term costs about 136,000. That is less than half the interest, for a monthly payment that is only around 38% higher.
Shorter terms also tend to come with a lower interest rate, because the lender's money is at risk for less time. The trade-off is flexibility. A 30-year mortgage with voluntary extra payments gives you most of the savings, while still letting you pay the smaller amount in a difficult month. Whether that flexibility is worth the higher rate depends on how stable your income is.
What this calculator does not include
- Closing costs, which are paid when you buy and often add up to several percent of the price.
- Mortgage insurance premiums, which vary by lender and by the size of your down payment.
- Variable or adjustable rates, where the payment changes after an initial fixed period.
- Points paid upfront to reduce the interest rate.
- Any tax relief on mortgage interest, which exists in some countries but not others.
Not financial advice. These figures are estimates based on a standard formula. Your lender's quote will be different, and only the lender's own disclosure is binding. Speak to a qualified mortgage adviser before you commit.
Frequently asked questions
How much mortgage can I afford?
A common guideline is to keep total housing costs below about 28% of your gross monthly income, and all debt payments below about 36%. These are rules of thumb, and they do not take into account your other commitments or how secure your income is.
What is escrow?
Escrow is an account the lender manages for you. It collects property tax and insurance with each monthly payment and pays those bills when they are due, which is why they appear in your mortgage payment.
Should I choose a 15-year or a 30-year mortgage?
A 15-year loan costs far less in total interest and usually has a lower rate. A 30-year loan has a lower required payment and more flexibility. A middle path is a 30-year loan with voluntary extra payments, which captures most of the savings while keeping the smaller payment as an option.
Do I need a 20% down payment?
Often you do not. Below 20%, however, most lenders require mortgage insurance, which adds a monthly premium that protects the lender. That makes the last few percent before 20% especially valuable.
Does the calculator include closing costs?
No. Closing costs are paid once at purchase, not monthly, and they vary widely by location and lender. Budget for them separately; several percent of the purchase price is a reasonable starting estimate.
What is a good mortgage interest rate?
It depends on the current market, your credit history, the loan term and your down payment. Compare quotes from several lenders on the same day, because rates change often and a quote from last month tells you little.