Mortgage Calculator

Input: $300,000 home, 20% down, 4.5% rate, 30 years

Result: Loan: $240,000. Monthly P&I: $1,216.04. With $3,600/yr tax and $1,200/yr insurance: PITI = $1,566.04/month.

How much house can I afford with my salary?

A common guideline is the 28/36 rule: your monthly housing payment (principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income, and your total monthly debt should not exceed 36%. For example, if you earn $6,000/month, your housing payment should stay under $1,680. Enter your income and desired home price in this calculator to see if the payment fits within that range. Remember to include property taxes and insurance in your estimate, not just principal and interest.

Why does my amortisation schedule show so little principal in the first year?

On a 30-year mortgage at 6%, only about 10–15% of your first year's payments go toward principal — the rest is interest. This is because interest is calculated on the remaining balance, which is at its highest at the start. By year 20, the ratio flips: most of each payment goes to principal. This is why making extra payments early in the loan has a much larger impact than the same extra payment made years later.

How much house can I actually afford — the 28/36 rule explained

The 28/36 rule is a guideline lenders use: your monthly housing payment (PITI) should not exceed 28% of your gross monthly income, and your total monthly debt (including the mortgage, car loans, student loans, and credit cards) should not exceed 36%. Enter your income in the calculator and set the home price so that the PITI result stays under 28% of your monthly income. This gives you a realistic purchase price ceiling, not just what a lender will approve.

What is PMI and when can I remove it?

PMI (Private Mortgage Insurance) protects the lender if you default. It is typically required when your down payment is less than 20% of the home value. PMI costs 0.5-1% of the loan amount annually and can be removed once you reach 20% equity — either through paying down the principal or through home appreciation. For conventional loans, you can request PMI removal at 80% LTV; it automatically terminates at 78% LTV.

How do I estimate property taxes and insurance?

Property taxes vary by location but typically range from 0.5-2% of home value annually. Homeowners insurance averages $1,200-$2,000/year. Check with local tax assessors and insurance agents for accurate estimates in your area.

Should I choose a 15-year or 30-year mortgage?

15-year mortgages have higher monthly payments but significantly lower total interest costs. 30-year mortgages have lower monthly payments but you'll pay more interest over time. Use our calculator to compare both options based on your budget and financial goals.

What is the difference between PMI and MIP, and which one applies to my loan?

PMI (Private Mortgage Insurance) applies to conventional loans with less than 20% down. MIP (Mortgage Insurance Premium) applies to FHA loans and has two parts: an upfront premium (1.75% of the loan amount, typically rolled into the loan) and an annual premium (0.45-1.05% of the loan, paid monthly). Unlike PMI, MIP cannot be removed on most FHA loans originated after 2013 — you must refinance into a conventional loan to drop it. VA loans have a funding fee but no ongoing mortgage insurance. Knowing which type your loan has is critical because MIP can cost $200-$400/month for the life of the loan, while PMI can be removed at 80% LTV.

How do I calculate my loan-to-value (LTV) ratio and why does it matter?

LTV is your loan amount divided by the appraised home value, expressed as a percentage. If you borrow $240,000 on a $300,000 home, your LTV is 80%. LTV matters because: (1) above 80% LTV, conventional loans require PMI; (2) above 95% LTV, some lenders decline the loan or charge higher rates; (3) below 80% LTV, you get the best rates and no PMI. To lower your LTV, increase your down payment or negotiate a lower purchase price. Use this calculator by entering different home prices and down payments to see how LTV affects your monthly payment.

What closing costs should I expect when buying a home?

Closing costs typically run 2-5% of the loan amount and include: origination fees (0.5-1%), appraisal ($300-$600), title insurance ($500-$1,500), survey ($300-$700), attorney fees (varies by state), recording fees, and prepaid escrow for property taxes and insurance (3-6 months upfront). On a $300,000 loan, expect $6,000-$15,000 in closing costs. Some lenders offer "no closing cost" mortgages, but these typically come with a higher interest rate — you pay the costs over time instead of upfront. Use this calculator to compare: enter the higher rate to see how much extra interest you pay over the term versus paying closing costs upfront.

How does an escrow account work and what does it cover?

An escrow account is set up by your lender to collect money for property taxes and homeowners insurance as part of your monthly payment. Each month, 1/12 of your annual tax and insurance bill goes into escrow. When the bills come due, the lender pays them from escrow. Your total monthly payment (PITI) = Principal + Interest + Taxes + Insurance. The calculator shows the principal and interest portion; add 1/12 of your annual property taxes and insurance to get your full PITI payment. Escrow is required for most loans with less than 20% down; it may be optional (but recommended) with 20%+ equity.

What happens if I make one extra mortgage payment per year?

One extra payment per year on a 30-year mortgage at 6% can shorten the loan by about 5 years and save tens of thousands in interest. On a $250,000 loan at 6.5%, the standard monthly payment is $1,580. Making one extra $1,580 payment each year (or splitting it into $132/month extra) reduces the term from 30 to ~25 years and saves approximately $68,000 in interest. Use the calculator's extra payment feature to model your exact loan amount and rate — the amortisation schedule will show the shortened term and reduced total interest.

How do I decide between a fixed-rate and an adjustable-rate mortgage (ARM)?

A fixed-rate mortgage (FRM) keeps the same rate for the entire term — predictable but typically starts higher. An ARM has a lower initial rate for a set period (e.g., 5/1 ARM = fixed for 5 years, then adjusts annually), but the rate can rise significantly at adjustment. ARMs make sense if you plan to move or refinance before the first adjustment, or if you expect rates to fall. They are risky if you plan to stay long-term, since rate caps typically allow increases of up to 5% above the initial rate. Use this calculator to model both: enter the FRM rate to see the stable payment, then enter the ARM's initial rate and imagine it rising by 2-3% at the first adjustment to see the worst-case payment.

What is a jumbo loan and how is it different from a conventional loan?

A jumbo loan exceeds the conforming loan limit set by Fannie Mae and Freddie Mac. In most US counties, the 2024 conforming limit is $766,550; in high-cost areas it can go up to $1,149,825. Loans above these limits are jumbo loans, which typically require: 10-20% down payment (vs 3-5% for conventional), a credit score of 700+ (vs 620), a DTI of 43% or lower, and 6-12 months of cash reserves. Jumbo rates are sometimes lower than conventional rates because lenders hold these loans on their own books rather than selling them. Use this calculator with loan amounts above the conforming limit to see the payment — the math is the same, but the qualification requirements are stricter.

How do I calculate the break-even point for refinancing my mortgage?

The break-even point is when your cumulative savings from the lower rate equal the closing costs of the refinance. If refinancing from 7% to 6% on a $300,000 loan saves you $200/month and closing costs are $4,500, the break-even is 22.5 months ($4,500 / $200). If you plan to stay in the home longer than 22 months, refinancing pays off. But also consider: (1) refinancing resets the amortisation clock — you start paying mostly interest again, which can offset some savings if you are already years into the loan; (2) if you refinance into a shorter term (e.g., 30 to 20 years), the payment may not drop even though the rate is lower; (3) cash-out refinances increase your loan balance, so the break-even must account for the additional principal.

How do I use the mortgage payoff calculator?

Enter your loan amount, interest rate, original term, and the number of years remaining. The calculator shows how many months it will take to pay off the remaining balance at your current payment rate. You can also enter extra monthly payments to see how much sooner the mortgage is paid off and how much interest you save. For example, adding $200/month to a $250,000 loan at 6.5% with 20 years remaining can save over $40,000 in interest and pay off the loan 6 years earlier.

How do I calculate a mortgage with extra payments?

Enter your loan details and add an extra payment amount in the extra payment field. The calculator recalculates the amortisation schedule with the extra amount applied to principal each month. For example, on a $300,000 mortgage at 7% for 30 years, the standard payment is $1,996. Adding $300/month reduces the term from 30 years to about 21 years and saves approximately $140,000 in interest. The calculator shows the new payoff date, shortened term, and total interest savings.

How do I calculate paying off my mortgage early?

Use the extra payment feature to model different strategies. Three common approaches: (1) add a fixed extra amount each month (e.g., $200/month); (2) make one extra payment per year (divide your monthly payment by 12 and add that amount monthly); (3) round up your payment to the nearest hundred. The calculator shows the impact of each strategy on your payoff date and total interest. Even small extra amounts make a large difference because they reduce principal early in the loan when interest costs are highest.

How do I use the mortgage amortization calculator?

Enter the mortgage principal, annual interest rate, and loan term. The calculator produces the monthly payment and an amortization schedule showing each payment's principal, interest, and remaining balance. For example, a $300,000 mortgage at 6.5% for 30 years has a monthly principal-and-interest payment of about $1,896. The schedule lets you see exactly when the balance falls below a target amount.

How do I calculate a mortgage with extra payments and an amortization schedule?

Enter your normal mortgage details, then add the extra monthly payment. The calculator recalculates every row of the amortization schedule with the additional amount applied to principal. You can see the new payoff date, total interest, and interest saved compared with the original schedule. Try several extra-payment amounts to find a strategy that fits your budget.

What is a mortgage recast and can I calculate the new payment?

A mortgage recast applies a large lump-sum payment to principal and recalculates the monthly payment over the remaining term without refinancing. For example, after paying $50,000 toward a $300,000 balance, the lender recalculates payments using the new $250,000 balance. A recast usually has a small fee and keeps the existing interest rate. Enter the reduced balance and remaining term in the calculator to estimate the new principal-and-interest payment.

How do I use a cash-out refinance mortgage calculator?

A cash-out refinance replaces your mortgage with a larger loan and gives you the difference in cash. Enter the new loan amount (existing payoff balance plus cash needed), the new interest rate, and the new term. Compare the new payment and total interest with your current mortgage, and include closing costs in the new balance. Cash-out refinancing can lower your rate but increases your debt and may extend the payoff date.

How do I calculate the break-even point for mortgage refinance costs?

Add the refinance closing costs, appraisal, title work, and other fees. Divide the total cost by the monthly payment savings. If costs are $5,000 and monthly savings are $250, the break-even point is 20 months. You should generally plan to keep the new mortgage beyond that point, while also checking the total interest because restarting a 30-year term can reduce the apparent monthly savings.

How do I compare a 15-year and 30-year mortgage?

Run the calculator twice with the same loan amount and interest rate, changing only the term. A 15-year mortgage normally has a higher monthly payment but substantially less total interest. A 30-year mortgage lowers the required payment and preserves cash flow. Compare both the monthly payment and total interest, then consider whether the higher 15-year payment fits your budget even during an income change.

How does a biweekly mortgage payment calculator work?

A biweekly schedule makes a payment every two weeks, creating 26 half-payments or the equivalent of 13 monthly payments each year. The extra half-payment reduces principal faster and can shorten a 30-year mortgage by several years. Enter the same principal, rate, and term, then compare the biweekly schedule with monthly payments to see the exact interest savings.

What is the difference between a mortgage payment and an amortization payment?

The mortgage payment is the amount due each period. The amortization payment is the portion allocated to principal and interest according to the loan schedule. Your full payment may also include property taxes, homeowners insurance, PMI, or HOA costs. This calculator focuses on principal and interest unless you separately estimate those other housing costs.

How do I calculate a mortgage payoff date?

Enter the current balance, interest rate, and current payment. Add any extra monthly or one-time payments, then read the projected payoff date from the amortization schedule. A payoff calculator is more accurate when you use the current balance and remaining term rather than the original purchase price and original term.

How much does one extra mortgage payment save?

The savings depend on the balance, rate, term, and timing. One extra payment each year reduces principal earlier and can shorten a 30-year mortgage by roughly four to six years. Enter the regular payment divided by 12 as an extra monthly amount to model the same strategy. The calculator reports the exact interest saved for your loan.

How do I calculate mortgage points and discount points?

One discount point usually costs 1% of the loan amount and lowers the interest rate by a lender-specific amount. Enter the reduced rate and add the points to your upfront costs. To find the break-even period, divide the cost of the points by the monthly payment savings. Points may be worthwhile when you expect to keep the mortgage beyond that break-even period.

How do I estimate a mortgage payment with a down payment?

Subtract the down payment from the purchase price to find the starting loan amount, then enter that amount, the interest rate, and the term. A larger down payment lowers the payment and may eliminate PMI. Compare the payment savings with the cash you would keep available for closing costs, repairs, and emergency reserves.

How do FHA mortgage calculator payments differ from conventional payments?

FHA financing usually includes an upfront mortgage insurance premium and an annual mortgage insurance premium paid monthly. Conventional financing may require PMI when the down payment is below 20%, but PMI can generally be removed after sufficient equity. Enter the loan amount and rate for either option, then add the applicable insurance and upfront costs when comparing the full payment.

How do I calculate an interest-only mortgage payment?

An interest-only payment is the outstanding principal multiplied by the annual interest rate divided by the number of payments per year. A $300,000 balance at 6% has an interest-only monthly payment of $1,500. Interest-only loans can later require principal payments or a balloon payment, so compare the initial payment with the fully amortizing payment before choosing one.

What is a balloon mortgage amortization schedule?

A balloon mortgage has regular payments calculated over a longer amortization period but requires the remaining balance at a shorter maturity date. The amortization schedule shows the balance due at that date. For example, a five-year term amortized over 30 years leaves a large balance after five years. You need a plan to refinance, sell, or pay that balance.

How do I calculate a commercial mortgage payment?

Enter the commercial property loan amount, interest rate, and term. Commercial loans often have shorter terms, balloon balances, variable rates, or interest-only periods, so check the loan documents carefully. Use the amortization schedule to identify the balance due at maturity and do not treat the estimate as a lender approval.

How do I calculate home equity loan payments?

Enter the amount borrowed, annual rate, and repayment term. A fixed-rate home equity loan produces a regular amortizing payment, while a HELOC typically has a variable rate and may begin with an interest-only draw period. Compare the payment and total interest, and remember that home equity borrowing is secured by your property.

How do I calculate mortgage interest tax deductions?

The calculator can show total interest paid across the amortization schedule. Whether that interest is deductible depends on your country, filing status, loan purpose, balance limits, and tax rules. Use the interest total as an estimate only and confirm eligibility with current tax guidance or a qualified tax professional.

How do I calculate the loan-to-value ratio for a mortgage?

Divide the loan amount by the home value and multiply by 100. A $240,000 loan on a $300,000 home has an 80% LTV. LTV affects pricing, PMI requirements, and refinancing options. Test different down payments in the calculator to see how the starting balance and payment change.

How do I compare mortgage offers with different fees?

Calculate each offer using its interest rate and term, then add origination charges, points, closing costs, and recurring insurance where applicable. Compare total payments and the expected cost over the number of years you plan to keep the home, not just the advertised monthly payment. APR can help, but your own holding period determines the better offer.

Can I use the mortgage calculator for a home loan in Canada or another country?

The principal-and-interest math works internationally, but payment frequency, compounding conventions, taxes, insurance, and qualification rules vary by country. Enter the lender's effective rate and payment frequency, then verify the result against the local loan disclosure. Treat local tax and insurance estimates separately.

How do I calculate mortgage payments from a monthly budget?

Use the loan amount or home price and adjust the interest rate, term, and down payment until the principal-and-interest payment fits your budget. Then add estimated taxes, insurance, PMI, and HOA fees to get the full housing cost. A payment that fits the calculator alone may still be too high once those additional costs are included.

How do I calculate a mortgage payment with taxes and insurance?

Calculate principal and interest first, then add annual property taxes divided by 12 and annual homeowners insurance divided by 12. Add PMI or HOA dues if they apply. The result is the estimated PITI-style payment; actual taxes and insurance depend on the property and location.

How do I calculate a mortgage payment with PMI?

Estimate annual PMI as a percentage of the loan balance, divide it by 12, and add it to principal, interest, taxes, and insurance. PMI pricing varies by credit score, loan type, down payment, and insurer. Use the lender's quote for the final amount and model when PMI may end as your LTV falls.

How do I calculate the total interest on a mortgage?

Multiply the scheduled payment by the number of payments and subtract the original principal. The amortization schedule provides the same result by summing every interest entry. Extra payments reduce total interest because they lower the balance used for future interest calculations.