Mortgage calculator
Free mortgage calculator. See your monthly payment, total interest paid, and how much you'd save with extra monthly payments — instantly.
Key mortgage terms (used throughout this page)
- PITI
- Principal + Interest + Taxes + Insurance. The four components of full housing cost. Our calc shows P&I; add taxes/ins for true monthly cost.
- Amortization
- How each payment splits between interest and principal. Year 1 is mostly interest; year 30 mostly principal.
- PMI
- Private Mortgage Insurance. Required if down payment < 20%. ~0.5-1.5% of loan annually until 80% LTV is reached.
- LTV
- Loan-to-Value ratio = loan balance ÷ home value. 80% is the PMI removal threshold; 80%+ also tightens refinance eligibility.
- DTI
- Debt-to-Income. Total monthly debt ÷ gross income. Conv. cap 36% back-end; FHA up to 43%; rarely beyond 50%.
- Points
- Prepaid interest. 1 point = 1% of loan paid upfront to drop the rate ~0.25%. Worth it if you'll keep the loan long enough to break even (typically 5+ years).
How is a mortgage payment calculated?
A monthly mortgage payment is calculated with the formula M = P × [r(1+r)n] / [(1+r)n − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12). For a $300,000 loan at 6.5% over 30 years, the monthly principal-and-interest payment is about $1,896. Property tax, homeowners insurance, and HOA fees are added separately.
How mortgage payments work
A mortgage payment is calculated using the amortization formula. Early payments are mostly interest; later payments are mostly principal. On a $300,000 mortgage at 6.5% for 30 years:
- Year 1: ~$19,400 goes to interest, only $3,350 to principal
- Year 15: split roughly 50/50
- Year 30: almost entirely principal
This is why extra payments early in the loan are dramatically more valuable than extra payments late. An extra $100 in year 1 reduces the principal that all future interest is calculated on for 29 more years.
Extra payment impact (on a $300k, 6.5%, 30-year mortgage)
- $0 extra: $682,633 total paid, $382,633 in interest
- $100/month extra: $621,000 total, pays off 4.5 years early. Saves $61,000
- $200/month extra: $591,000 total, pays off 7 years early. Saves $91,000
- $500/month extra: $520,000 total, pays off 13 years early. Saves $163,000
- $1,000/month extra: $460,000 total, pays off 18 years early. Saves $222,000
30-year vs 15-year mortgage
Same $300,000 loan at historical average rates:
- 30-year at 6.5%: $1,896/month, $382,633 total interest
- 15-year at 5.75%: $2,492/month, $148,587 total interest
15-year saves $234,000 in interest but costs $596/month more. If you can afford the higher payment, 15-year wins. If cash flow is tight, 30-year with aggressive extra payments is often optimal — you get 80% of the savings with 100% of the flexibility.
Beyond P&I: the full cost of home ownership
Your mortgage payment isn't the full cost. Budget for:
- Property tax: 0.5-2.5% of home value annually, varies dramatically by state (TX, IL, NJ are highest)
- Homeowners insurance: $1,200-$2,500/year depending on location and coverage
- PMI: if you put less than 20% down, ~0.5-1% of loan annually until equity hits 20%
- HOA: $100-$500/month if applicable
- Maintenance: budget 1-2% of home value per year (often ignored, always hits)
A $1,896 mortgage payment is often $2,500-$3,000+ in actual monthly housing cost.
Should I pay off my mortgage early or invest?
Depends on your mortgage rate:
- Rate under 5%: invest extra money instead. Historical stock returns (~8-10%) beat the guaranteed rate of payoff
- Rate 5-7%: split — some extra payments, some investing
- Rate 7%+: aggressive payoff makes sense. Beating 7% in investments is harder than it sounds
There's also a behavioral argument: paid-off mortgage = psychological freedom. Some choose payoff even when math favors investing.
Mortgage rates in 2026: where the market sits
- 30-year fixed average: 6.7-7.1% (Freddie Mac PMMS weekly survey). Down from 7.8% 2023 peak; up from 3% 2021 lows.
- 15-year fixed average: 6.0-6.3%. The 15/30 spread is ~0.6-0.8 percentage points in 2026.
- 5/1 ARM: 6.3-6.8%. Risky if you can't refinance later — payment can jump 2+ percentage points at reset.
- Jumbo loans: 6.5-7.0% (often slightly cheaper than conforming above $806,500 baseline conforming limit, $1.21M in high-cost areas).
- FHA loans: 6.4-6.8% with 3.5% down and MIP for the life of the loan (vs PMI removable at 80% LTV).
- VA loans (veterans): 6.2-6.6% with 0% down, no PMI/MIP — the best rates available if you qualify.
- Median US home price: ~$415K (NAR existing-home median, 2026). Median first-time buyer down payment: 9%.
The Fed has cut its policy rate 3× since late 2025, but the 10-year Treasury (which drives mortgage rates) hasn't followed proportionally. Expect mortgage rates to drift down only if 10-year Treasury yields drop — not just because the Fed cuts.
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Methodology & sources
- Amortization formula: standard annuity present-value (M = P × r(1+r)^n / [(1+r)^n − 1])
- 30-yr / 15-yr / ARM rate averages: Freddie Mac Primary Mortgage Market Survey (PMMS), weekly
- Conforming loan limits: FHFA 2026 Conforming Loan Limit notice
- Median home price & down payment: NAR Existing-Home Sales + Profile of Home Buyers and Sellers
- FHA/VA underwriting rules: HUD Handbook 4000.1, VA Lenders Handbook
- PMI guidelines: Homeowners Protection Act of 1998
- Property tax averages: Tax Foundation state-level effective rates