Mortgage Calculator

Intro

Estimate a home loan payment from price, down payment, rate and years. Check that the monthly term matches the agreement; 5 years is 60 monthly payments.

A mortgage calculator estimates the principal-and-interest instalment for a home loan; it does not determine whether a property is affordable or whether a lender will approve you. Start with the property price, subtract the down payment, and check whether taxes, insurance and closing costs are outside the displayed figure.

A twenty percent down payment on a home priced at 300,000 leaves a 240,000 principal before financed charges. The same property can create different obligations if the down payment, contractual interest rate or repayment period changes. Estimate the entire household housing budget, not only the scheduled loan instalment.

About this result

How to use

Enter the amount and nominal annual rate; choose a term; calculate; compare the monthly payment with the full-term total. Use the same currency for every amount.

Formula

Monthly rate r = annual percentage rate ÷ 1200 and n = monthly payments. If r > 0, payment M = P × r ÷ [1 − (1 + r)^(-n)]; if r = 0, M = P ÷ n. P is the borrowed principal. The borrowed amount is home price minus down payment. Monthly result covers principal and interest only; property taxes, homeowners insurance, mortgage insurance and closing costs are outside this calculation.

For a fully amortizing fixed-rate mortgage, monthly principal and interest equal P × r ÷ [1 − (1+r)^(−n)]. P is the outstanding amount initially borrowed, r is the nominal annual interest rate divided by twelve and expressed as a decimal, and n is the number of scheduled monthly payments.

For a six percent nominal annual rate, use r = 0.06 ÷ 12 = 0.005. A thirty-year term means n = 360; a fifteen-year term means n = 180. If the rate is exactly zero, the monthly principal-and-interest payment is simply P ÷ n.

This equation assumes monthly compounding under the specified amortization convention and a stable contractual rate. It does not itself model adjustable-rate resets, interest-only periods, balloon balances, extra principal payments or lender-specific day-count rules. Those require separate calculations and contract review.

Worked example

Home price: 300000; Down payment: 60000; Nominal annual interest rate (%): 6.5; Repayment term (years): 30. Monthly principal and interest: 1516.96; Total interest: 306106.77.

Home price: 300000; Down payment: 60000; Nominal annual interest rate (%): 6.5; Repayment term (years): 20. Monthly principal and interest: 1789.38; Total interest: 189450.13.

Suppose the property costs 300,000 monetary units and the buyer makes a 60,000 down payment. The principal is therefore 240,000. Assume a fixed six percent nominal annual rate, no financed fees and one payment each month. This is a numerical illustration, not a market rate quote.

The monthly rate is 0.005 and thirty years produce 360 payments. Substituting into the amortization equation gives a principal-and-interest payment of approximately 1,438.92 per month. Over 360 payments, unrounded totals are roughly 518,011.65, including about 278,011.65 in interest.

Keeping the same principal and six percent rate but shortening the loan to fifteen years changes n to 180. The payment rises to about 2,025.26 a month; total interest falls to approximately 124,546.15. The lower lifetime interest requires a significantly higher monthly cash commitment.

Understand the calculation

The borrowed amount is home price minus down payment. Monthly result covers principal and interest only; property taxes, homeowners insurance, mortgage insurance and closing costs are outside this calculation.

Enter the amount and nominal annual rate; choose a term; calculate; compare the monthly payment with the full-term total. Use the same currency for every amount.

Check that the monthly term matches the agreement; 5 years is 60 monthly payments.

The estimate assumes one equal payment at the end of each month. Early payments contain more interest because the outstanding balance is larger; later payments reduce more principal. The result is rounded to two decimals, while totals are calculated from the unrounded payment.

Do not enter a percentage as a decimal fraction: 6.5 means 6.5%, not 0.065. A shorter term raises the monthly payment but usually reduces total interest. Compare fees and the actual repayment schedule separately.

This is a fixed-rate, fully amortizing estimate, not a lender offer. It excludes fees, taxes, insurance, changes in rates, and lender-specific rounding. Check an actual loan offer before deciding.

If you expect to pay extra occasionally, read the prepayment terms first. A lower outstanding balance may shorten the term instead of immediately reducing the contractual monthly payment.

Questions

Is this the total borrowing cost?

No. The calculation covers principal and contractual interest only; fees and other charges can increase the cost.

What happens at 0% interest?

The monthly payment becomes the principal divided by the number of months, so the interest component is zero.

Does a longer term lower the payment?

Usually yes for the same amount and rate, but paying for more months generally increases total interest.

Does the monthly amount include taxes and insurance?

No. It estimates principal and interest only. A real housing payment can also contain taxes, insurance and other charges.

Why convert years to months?

Check that the monthly term matches the agreement; 5 years is 60 monthly payments.

Does the mortgage payment include property tax?

The principal-and-interest formula does not include property tax. Many mortgage servicers collect estimated taxes through escrow, which increases the amount paid monthly. The actual bill and collection method vary by property and jurisdiction.

How does a down payment change the result?

The down payment lowers the amount borrowed when property price and other terms remain unchanged. A smaller principal normally reduces scheduled interest and principal payments. Down payment levels may also affect insurance requirements and cash reserves.