The Mortgage Calculator helps home buyers, real estate investors, and homeowners estimate their exact monthly mortgage payments (principal and interest), total interest paid over the life of the loan, and complete amortization schedule. It accounts for home price, down payment, annual interest rate, and loan term in years.
- 1
Home Price: Enter the total purchase price of the property.
- 2
Down Payment: Enter the upfront cash amount or percentage you plan to pay.
- 3
Interest Rate & Term: Input the annual fixed interest rate (%) and loan duration (15, 20, or 30 years).
- The Concept: Each monthly mortgage payment is split into two parts: principal reduction and interest cost. In the early years of a mortgage, most of your monthly payment goes toward interest, while in later years, the majority reduces your principal balance.
- The Formula: Monthly Payment (M) = P × [r(1+r)^n] / [(1+r)^n - 1] where P is loan principal, r is monthly interest rate, and n is total number of monthly payments.
Suppose you purchase a home for $400,000 with a 20% down payment ($80,000) at a 6.5% interest rate on a 30-year fixed mortgage:
- 1
Loan Principal (P) = $400,000 - $80,000 = $320,000.
- 2
Monthly Interest Rate (r) = 6.5% / 12 = 0.0054167. Total Payments (n) = 30 × 12 = 360 months.
- 3
Monthly Payment (P&I) = $2,022.62 per month.
- 4
Total Repayment over 30 Years = $728,144 (containing $408,144 in total interest costs).
