Calculate your monthly mortgage payment, total interest costs, and generate an amortization schedule based on your mortgage details.
A mortgage is a loan used to purchase real estate, which serves as collateral. Understanding the components of your mortgage can help you make better financial decisions.
The type of mortgage you choose affects your interest rate, monthly payment, and overall cost:
Early in your mortgage, most of your monthly payment goes toward interest rather than principal. This gradually shifts over time. Making additional principal payments early can significantly reduce your total interest costs and shorten your loan term.
Making biweekly payments (26 half-payments per year) instead of monthly payments (12 full payments) results in one extra full payment annually, which can shave 4-6 years off a 30-year mortgage and save tens of thousands in interest.
While a 20% down payment eliminates PMI, don't deplete your emergency fund to reach this threshold. Having cash reserves for unexpected home repairs or personal emergencies should take priority over avoiding PMI.
On a typical 30-year mortgage, you'll pay significantly more in interest than the original loan amount. For example, on a $300,000 loan at 4% interest, you'll pay approximately $215,600 in interest over 30 years—nearly 72% of the original loan amount!
A mortgage is a loan specifically designed for purchasing property. The property serves as collateral for the loan. You'll make regular payments (typically monthly) over a set period (often 15 or 30 years) until the loan is paid off. Each payment includes principal (reducing the loan balance) and interest (the cost of borrowing).
Several factors influence your mortgage interest rate including your credit score, loan-to-value ratio (determined by your down payment), loan term, loan type (fixed vs. adjustable), current market conditions, and the overall economic environment. Generally, a higher credit score and larger down payment lead to a more favorable interest rate.
An amortization schedule is a complete table of periodic loan payments showing the amount of principal and interest in each payment until the loan is paid off. Initially, a larger portion of each payment goes toward interest, but as the loan matures, more goes toward paying down the principal.
Private Mortgage Insurance (PMI) is typically required when your down payment is less than 20% of the home's purchase price. PMI protects the lender if you default on your loan. Once you reach 20% equity in your home, you can usually request to have PMI removed from your payments.
Property taxes vary widely based on location, but typically range from 0.5% to 2.5% of your home's value annually. Homeowners insurance generally costs $800-$1,500 per year for an average home. When using our calculator, you can research specific rates for your area to get a more accurate estimate.
A 15-year mortgage typically offers a lower interest rate but higher monthly payments compared to a 30-year mortgage. With a 15-year mortgage, you'll build equity faster and pay significantly less interest over the life of the loan. A 30-year mortgage provides lower monthly payments, making it more affordable month-to-month, but you'll pay more interest in total.
While 20% is often cited as the ideal down payment (as it eliminates the need for PMI), many loan programs accept much less. FHA loans require as little as 3.5%, and conventional loans may accept 3-5%. A larger down payment reduces your loan amount, monthly payments, and total interest paid, but should be balanced with maintaining emergency savings.
A fixed-rate mortgage maintains the same interest rate throughout the entire loan term, providing predictable monthly payments. An adjustable-rate mortgage (ARM) typically starts with a lower interest rate that can change periodically based on market conditions. ARMs often have a fixed period (e.g., 5 or 7 years) before rates begin to adjust.
This calculator provides a good estimate of your potential mortgage payments, but actual amounts may vary. The calculator doesn't account for all possible fees like closing costs, HOA fees, or mortgage points. Additionally, property tax rates and insurance premiums may change over time. For the most accurate information, consult with a mortgage lender.
Yes, most mortgages allow for early payoff, but check if your loan has any prepayment penalties. Strategies for paying off your mortgage early include making bi-weekly instead of monthly payments, making one extra payment per year, or rounding up your payment amount. Even small additional payments toward principal can save substantial interest over the life of the loan.